Raphael Stevens

More stories

  • 125 Shares129 Views

    in Finance

    Why fine wine and fancy art have slumped this year

    OENOPHILES, ART aficionados, petrolheads and all those who like the finer things in life have, alas, not had the best year. The prices of their luxury assets have tanked. An investor who put their money into art at the beginning of 2024 lost on average 16% by the end of November, according to the All Art index, a measure assembled by Art Market Research, which tracks sales at auction. Those who invested in fine wine lost about 11% over the same period, according to the Liv-ex Fine Wine 1000 gauge—the closest thing to a global benchmark for the wine industry. The price of diamonds has dropped by almost 20% and those of collectible cars are more or less flat. More

  • 138 Shares99 Views

    in Finance

    10-year Treasury yield back above 4.6% after mixed jobless claims data

    Treasury yields were slightly higher early Friday after a mixed set of data on weekly jobless claims.
    The yield on the benchmark 10-year Treasury was 3 basis points higher at 4.607%, slightly down from its peak earlier in the week but back above the 4.6% level it had not breached since May. The 2-year Treasury was fractionally higher at 4.334%.

    One basis point is equal to 0.01%. Yields move inversely to prices.

    After the Christmas break, jobless claims data released Thursday for the week ending Dec. 21 came in 1,000 lower at 219,000, below the 225,000 consensus forecast from Dow Jones.
    However, continuing claims rose by 46,000 for the week ending Dec. 14 to the highest level since November 2021.
    The 10-year Treasury yield has risen more than 40 basis points in December as traders anticipate a more hawkish Federal Reserve in 2025. The central bank next meets at the end of January, when a rate hold is expected.
    Monthly data on wholesale inventories is due Friday. More

  • 150 Shares99 Views

    in Business

    Airlines’ wild 2024: From Boeing troubles to a bankruptcy and a merger

    The drama-filled year in airlines started with a midair door panel blowing off a nearly new Boeing 737 Max 9.
    2024 also brought an activist campaign to Southwest, an IT meltdown that stranded hundreds of thousands of Delta travelers during the height of summer travel and the first major U.S. airline merger since 2011.
    Holiday demand broke records and airline executives say bookings are strong into 2025.

    People check-in for their flights at the airport ahead of the Thanksgiving Holiday at Hartsfield-Jackson Atlanta International Airport, in Atlanta, Georgia, U.S., November 27, 2024. 
    Megan Varner | Reuters

    It’s been another eventful year for U.S. air travel. Just five days into the year, a door panel blew off of a nearly new Boeing 737 Max, operated by Alaska Airlines, as it climbed out of Portland, Oregon, after sunset, plunging the airplane manufacturer back in crisis mode and delaying deliveries of new jets for months.
    Two weeks later, a federal judge blocked JetBlue Airways’ planned purchase of Spirit Airlines, leaving the smaller, battered budget carrier to fend for itself. Struggling Spirit ultimately filed for Chapter 11 bankruptcy protection in November.

    The drama-filled year also included an activist campaign at one of the country’s most cautious carriers, a tech meltdown that stranded hundreds of thousands of travelers during the height of summer travel and the first major U.S. airline merger since Barack Obama was president.
    Federal Aviation Administration chief Mike Whitaker announced he’ll step down on Jan. 20, about a year into a five-year term, and the day President-elect Donald Trump is inaugurated, leaving the critical agency that oversees everything from aircraft certification to the U.S. airspace yet again without a leader. Airline CEOs have been clamoring for more air traffic controllers and investment in air traffic technology.
    Meanwhile, carriers duked it out for who could be the most “premium” and profitable, with cabins closer to the front of the plane becoming more popular purchases for travelers (sorry to those seeking free upgrades). The top two contenders — stalwart Delta and challenger United — brought most of the industry’s profits, and their stock prices hit records, while smaller airlines leaned into roomier seats and announced higher-end credit cards.
    Airlines played chicken until the industry trimmed its glut of U.S. flights that were pushing down fares. But the international travel boom, well into the off-season, is showing no signs of slowing down. Through it all, demand for air travel overall smashed records, and CEOs are optimistic about next year, too.
    Here’s how they each fared in 2024:

    Delta Air Lines

    Travelers from France wait on their delayed flight on the check-in floor of the Delta Air Lines terminal at Los Angeles International Airport (LAX) on July 23, 2024 in Los Angeles, California. 
    Mario Tama | Getty Images

    The most profitable of U.S. carriers struggled to recover from a July 19 CrowdStrike outage that took hundreds of Microsoft Windows machines offline. It cost Delta Air Lines more than $500 million and left thousands of stranded customers, with a cancellation tally that topped all of 2019. Still, the carrier’s stock price hit a record this month.
    CEO Ed Bastian told CNBC last week that demand looks strong going into 2025. The airline has been stepping up its premium offerings for high-paying customers, like with three new Delta One lounges, dedicated to travelers flying in that eponymous highest-tier cabin; New York, Los Angeles and Boston opened this year, with more on the way.
    It’s a sign of Delta’s continued focus on upscale travelers and its “premium” brand, which like Spirit for budget travel, has become a punchline about the upper end of travel to the point that a “Saturday Night Live” sketch last week featured Martin Short playing a Delta employee who blocks actor Paul Rudd from entering a coveted Delta Sky Club, saying his name “sounds poor.”
    Delta stopped short of rolling out a business-class lite product that some analysts expected during a November investor day, but the new lounges could relieve crowding at Delta’s popular Sky Clubs.

    United Airlines

    An American Airlines airplane passes behind a United Airlines airplane at Newark Liberty International Airport in Newark, New Jersey, on Sept. 28, 2024.
    Gary Hershorn | Corbis News | Getty Images

    Can it beat Delta? It’s not clear whether the Magnolia Bakery banana pudding is enough to get more travelers to buy up to first class, but United Airlines is making other big moves, like expanding its network to include more premium leisure destinations from Mongolia to Greenland to northern Spain in the next year to capture customers seeking to travel off the beaten path of traditional U.S. airline destinations.
    The carrier has thrilled investors with its results this year and set lofty targets for next year. Its stock has more than doubled in 2024, becoming the top-performing carrier.
    United is introducing freshly outfitted narrow-body planes with new interiors featuring seat-back screens and Bluetooth connections into its fleet. It announced a Wi-Fi partnership powered by Elon Musk-owned SpaceX’s Starlink, and it won’t charge for the service, following Delta and JetBlue.
    CEO Scott Kirby early in the year said the carrier isn’t counting on Boeing’s yet-to-be-certified 737 Max 10 and will look at more Airbus planes as an alternative, but he’s thrown his support behind the plane maker’s new chief executive, Kelly Ortberg.

    Southwest Airlines

    Southwest Airlines new premium seats featuring extra legroom.
    Leslie Josephs/CNBC

    Say goodbye to open seating. The Dallas-based carrier shocked customers — faithful and frustrated alike — when it said in July that it would start assigning seats and update its uniform cabin to include several rows with extra legroom in a bid to increase its revenue. It was the biggest strategy change for the carrier in its almost half century of flying.
    While Southwest said it was working on the changes for months, the carrier announced them after activist hedge fund Elliott Investment Management took a roughly $2 billion stake in the airline and pushed for changes, including CEO Bob Jordan’s ouster. He survived the campaign, though ex-CEO and former Chairman Gary Kelly agreed to retire. In a truce, Southwest appointed six new board members in October, including five of Elliott’s nominees.

    American Airlines

    Jeff Greenberg | Universal Images Group | Getty Images

    American Airlines ousted its commercial chief, Vasu Raja, in May after a sales strategy that cut out travel agencies in favor of selling directly to business travelers backfired and the carrier abruptly slashed its sales guidance.
    Its outlook has improved, and executives are upbeat about year-end demand and into 2025. It signed a new credit card deal with its partner Citi, and will end things with its co-brand partner Barclays, a holdover from American’s 2013 merger with US Airways.

    Spirit Airlines

    LaGuardia International Airport Terminal A for JetBlue and Spirit Airlines in New York.
    Leslie Josephs | CNBC

    The budget carrier comedians love to hate saw its problems snowball this year, starting with a federal judge blocking Spirit’s acquisition by JetBlue in January.
    Merger off, Spirit was left to face its other problems: a surge in labor and other costs post-pandemic, high competition in domestic markets, a jump in travel demand to places it doesn’t fly (like Italy and Japan), and Pratt & Whitney’s engine recall that has had an outsize affect on Spirit, grounding dozens of its planes.
    Hemorrhaging money with a refinancing deadline approaching, Spirit filed for Chapter 11 bankruptcy protection last month, becoming the first major U.S. carrier to do since American Airlines in 2011. It expects to emerge in the first quarter and it’s an open question whether it will again attempt a combination with fellow budget carrier Frontier.
    The carrier changed its longstanding business model of charging a low fare and adding on fees for everything else, like seat selection, to offering more bundled options in the summer.

    JetBlue Airways

    A person sits on the edge of an engine of an Airbus A320 passenger aircraft of Jet Blue airlines in a maintenance hangar of the company at JFK International Airport in New York on March 4, 2024, prior of a Career Discovery Week event. 
    Charly Triballeau | AFP | Getty Images

    While Spirit saw its stock delisted after filing for bankruptcy, JetBlue forged ahead after the judge blocked the planned acquisition with a singular focus: slash costs and get back to profitability.
    New CEO Joanna Geraghty and former commercial chief Marty St. George, who returned to the airline as president in February, set out on JetForward, a strategy that aimed to refocus the airline, which had added too many money-losing routes after the pandemic with its premium-outfitted planes deployed to the wrong places.
    The carrier earlier this month announced it would update some of its jets with a domestic business class, to complement its aircraft that feature its top-tier Mint business class.
    Its shares are up more than 40% this year through Tuesday’s close, topping the S&P 500’s performance. Investors have been happy with its latest update that showed better-than-expected revenue.

    Alaska Airlines

    The fuselage plug area of Alaska Airlines Flight 1282 Boeing 737-9 MAX, which was forced to make an emergency landing with a gap in the fuselage, is seen during its investigation by the National Transportation Safety Board in Portland, Oregon, on Jan. 7, 2024.
    Ntsb | Via Reuters

    The airline started the year with the door plug blowout of one of its new Boeing planes, which led to a temporary grounding of Max 9s, and later a payout from Boeing, which makes the Maxes a few miles away in Renton, Washington.
    Months later, it was back to focusing on its nearly $2 billion acquisition of struggling carrier Hawaiian Airlines, a combination that got through antitrust regulators in the summer, marking the first merger of major U.S. carriers since Alaska bought Virgin America in 2016.
    Alaska has posted solid profits and enjoyed a surge in its stock price of more than 70% so far this year, a nearly threefold premium over the broader market. Executives painted an ambitious picture for investors earlier this month, announcing a global expansion for the combined airline that includes nonstop service on wide-body planes from Seattle — where its top competitor is Delta — to Europe and Asia.

    Frontier Airlines

    Frontier Airlines planes are parked at gates in Denver International Airport (DEN) in Denver, Colorado, on August 5, 2023.
    Daniel Slim | Afp | Getty Images

    First-class Frontier? The carrier is turning a profit again and is trying to go upscale, planning to outfit its planes with first-class domestic seats.
    It’s also planning to offer more bundles that include seat assignments, baggage and no change fees.
    CEO Barry Biffle said the airline expects to get back to double-digit margins in mid-2025 and credits recent improvement in results with a series of network changes, such as cutting flying during lower-demand days like Tuesdays, Wednesdays and Saturdays and in crowded markets like in Florida and Las Vegas.

    Allegiant Air

    A file photo of an Allegiant Air plane
    Source: Allegiant Air | Wikipedia

    Allegiant Travel’s foray into the hotel business hit a rough patch and said this summer said it would undergo a strategic review for its Sunseeker Resort in Florida. It added this fall that it was closing in on a capital partner for the property that located north of Fort Myers.
    The main business, low-cost Allegiant Airlines, has turned a corner, seeing high demand in peak periods, new CEO Greg Anderson told investors this fall. The carrier updated its fourth-quarter guidance that came in ahead of analyst estimates in early December.

    Sun Country

    A Sun Country Airlines jet
    Nick Potts | PA Images | Getty Images

    With enviable margins, especially for a low-fare airline, the carrier has benefited from its cargo-flying contract with Amazon and competitors cutting capacity from its home hub of Minneapolis, Deutsche Bank airline analyst Mike Linenberg said this month.
    “Sun Country’s revenue diversity provides the company with an economic moat that has allowed the carrier to maintain profitability during even the most volatile and intensely competitive quarters since the pandemic,” he wrote in a Dec. 11 note.
    The airline has been successful at switching its schedule with the seasons, ramping up service to warmer destinations in the winter.
    Disclosure: NBCUniversal is the parent company of CNBC and NBC, which broadcasts “Saturday Night Live.”

    Don’t miss these insights from CNBC PRO More

  • 213 Shares159 Views

    in Finance

    Treasury delays deadline for small businesses to file new form to avoid risk of fines for noncompliance

    The U.S. Treasury Department delayed a Jan. 1, 2025, deadline to file a new “beneficial ownership information” report by about two weeks, to Jan. 13.
    It delayed the BOI reporting requirement following recent federal court rulings.
    The requirement was created by the Corporate Transparency Act, which aims to curb illicit finance.

    Janet Yellen, U.S. Treasury secretary, on a tour of the Financial Crimes Enforcement Network (FinCEN) in Vienna, Virginia, on Jan. 8, 2024.
    Valerie Plesch/Bloomberg via Getty Images

    The U.S. Treasury Department has delayed the deadline for millions of small businesses to Jan. 13, 2025, to file a new form, known as a Beneficial Ownership Information report.
    The Treasury had initially required many businesses to file the report to the agency’s Financial Crimes Enforcement Network, known as FinCEN, by Jan. 1. Noncompliance carries potential fines that could exceed $10,000.

    This delay comes as a result of legal challenges to the new reporting requirement under the Corporate Transparency Act.
    The rule applies to about 32.6 million businesses, including certain corporations, limited liability companies and others, according to federal estimates.
    Businesses and owners that didn’t comply would potentially face civil penalties of up to $591 a day, adjusted for inflation, according to FinCEN. They could also face up to $10,000 in criminal fines and up to two years in prison.
    However, many small businesses are exempt. For example, those with over $5 million in gross sales and more than 20 full-time employees may not need to file a report.

    Why Treasury delayed the BOI reporting requirement

    The Treasury delayed the compliance deadline following a recent court ruling.

    A federal court in Texas on Dec. 3 had issued a nationwide preliminary injunction that temporarily blocked FinCEN from enforcing the rule. However, the 5th U.S. Circuit Court of Appeals reversed that injunction on Monday.

    “Because the Department of the Treasury recognizes that reporting companies may need additional time to comply given the period when the preliminary injunction had been in effect, we have extended the reporting deadline,” according to the FinCEN website.
    FinCEN didn’t return a request from CNBC for comment about the number of businesses that have filed a BOI report to date.
    Some data, however, suggests few have done so.
    The federal government had received about 9.5 million filings as of Dec. 1, according to statistics that FinCEN provided to the office of Rep. French Hill, R-Ark. That figure is about 30% of the estimated total.
    Hill has called for the repeal of the Corporate Transparency Act, passed in 2021, which created the BOI requirement. Hill’s office provided the data to CNBC.
    More from Personal Finance:’Returnuary’ — the year’s busiest return season is about to startWhy the ‘great resignation’ became the ‘great stay’What tariffs mean for car prices
    “Most non-exempt reporting companies have not filed their initial reports, presumably because they are unaware of the requirement,” Daniel Stipano, a partner at law firm Davis Polk & Wardwell, wrote in an e-mail.
    There’s a potential silver lining for businesses: It’s “unlikely” FinCEN would impose financial penalties “except in cases of bad faith or intentional violations,” Stipano said.
    “In its public statements, FinCEN has made clear that its primary goal at this point is to educate the public about the requirement, as opposed to taking enforcement actions against noncompliant companies,” he said.

    Certain businesses are exempt from BOI filing

    The BOI filing isn’t an annual requirement. Businesses only need to resubmit the form to update or correct information.
    Many exempt businesses — such as large companies, banks, credit unions, tax-exempt entities and public utilities — already furnish similar data.
    Businesses have different compliance deadlines depending on when they were formed.
    For example, those created or registered before 2024 have until Jan. 13, 2025, to file their initial BOI reports, according to FinCEN. Those that do so on or after Jan. 1, 2025, have 30 days to file a report.

    There will likely be additional court rulings that could impact reporting, Stipano said.
    For one, litigation is ongoing in the 5th Circuit, which hasn’t formally ruled on the constitutionality of the Corporate Transparency Act.
    “Judicial actions challenging the law have been brought in multiple jurisdictions, and these actions may eventually reach the Supreme Court,” he wrote. “As of now, it is unclear whether the incoming Trump administration will continue to support the Government’s position in these cases.”

    Don’t miss these insights from CNBC PRO More

  • 225 Shares139 Views

    in Finance

    More than 90% of 401(k) plans now offer Roth contributions – but only 21% of workers take advantage

    About 93% of 401(k) plans offer a Roth savings option to workers, up from 62% a decade ago, according to the Plan Sponsor Council of America.
    A law known as Secure 2.0 is expected to make Roth 401(k) accounts more prevalent.
    Choosing between Roth and pretax savings is essentially a tax bet.

    Filippobacci | E+ | Getty Images

    Retirement savers, take note: more employers have added a Roth savings option to their workplace 401(k) plans.
    And, due to a legislative change, it’s likely the remaining holdouts will soon offer it, too.

    About 93% of 401(k) plans offered a Roth account in 2023, according to an annual poll published in December by the Plan Sponsor Council of America, an employer trade group.
    That’s up from 89% in 2022 and 62% a decade ago, according to the survey, which polled more than 700 employers with 401(k) plans of varying size.

    How Roth, pretax 401(k) savings differ

    Roth refers to how retirement savings are taxed.
    A Roth is an after-tax account: Savers pay tax upfront on their 401(k) contributions but, with some exceptions, don’t pay later when they withdraw money.

    By contrast, pretax savings have been the traditional route for 401(k) plans. Savers get an upfront tax break, deferring their tax bill on investment earnings and contributions until later, when they make withdrawals.

    It seems like many aren’t taking advantage of Roth availability: About 21% of eligible workers made a Roth contribution in 2023, versus 74% who made a pretax contribution, according to PSCA data.

    How to choose between Roth or pretax contributions

    Choosing which kind of 401(k) contributions to make — pretax or Roth — largely comes down to your current tax bracket and expectations about your future tax rate, according to financial advisors.
    You want to choose the one that will keep your tax bill lowest. In short, it’s a tax bet.
    This requires some educated guesswork. For example, many financial advisors recommend Roth accounts for those who are early in their careers, a point at which their tax rate is likely to be lower than in the future, when their salary will almost certainly be higher.
    More from Personal Finance:Number of millennial 401(k) millionaires jumps 400%Biden ends some student loan forgiveness plansWhy the ‘great resignation’ became the ‘great stay’
    “We always recommend [Roth] for someone who’s in a low salary, typically the younger working folks,” said Olga Ismail, head of retirement plans consulting at Provenance Wealth Advisors.
    “It’s the lowest tax bracket you’re ever going to be in, so why not take advantage of it now if you can?” she said.
    A Roth 401(k) also provides a unique savings opportunity. Roth individual retirement accounts — Roth IRAs, for short — have a lower annual contribution limit than 401(k)s and have income caps on eligibility. A 401(k) has no income caps. So, a Roth 401(k) lets higher earners access a Roth account directly, and allows all savers to contribute more money to a Roth account than they could otherwise.

    Financial planners also generally recommend diversifying among pretax and Roth savings. This grants tax flexibility in retirement.
    For example, strategically withdrawing money from a Roth account for income may keep some retirees from triggering higher premiums for Medicare Part B and Medicare Part D. Those premiums may increase with income — but Roth withdrawals don’t count toward taxable income.
    Also, while many people expect their tax rates to decline in retirement, this isn’t always the case.

    Why Roth 401(k) adoption will increase

    More savers will likely soon have a Roth 401(k) option available to them if they don’t already.
    A 2022 retirement law known as Secure 2.0 will require “catch up” 401(k) contributions to be made to Roth accounts, if the worker’s income exceeds $145,000 (indexed to inflation). That rule takes effect in 2026.
    High earners age 50 or older would be required to contribute any additional savings over the annual 401(k) limit to a Roth account, meaning nearly all 401(k) plans would likely need to offer Roth accounts, Ismail said.

    Workers can save up to $23,000 in a 401(k) for 2024. Those age 50 and older can save an extra $7,500 in catch-up contributions.
    “Offering Roth as an option has become a best practice the last few years,” and due to the mandate for high earners, “we will continue to see Roth become commonplace,” said Hattie Greenan, PSCA’s research director.
    Additionally, Secure 2.0 allows businesses to make an employer 401(k) contribution like a match as Roth savings. About 13% of employers said they would “definitely” add the option, and another 35% said they’re still considering it, according to PSCA data. More

  • 125 Shares199 Views

    in Finance

    10-year Treasury yield rises above 4.6% ahead of jobless claims

    Traders work at the New York Stock Exchange on Dec. 17, 2024.

    Treasury yields rose Thursday morning as investors awaited new data on jobless claims.
    The yield on the 10-year Treasury jumped 4 basis points 4.627%. The 2-year Treasury traded 1 basis point higher at 4.353%.

    One basis point is equal to 0.01%. Yields move inversely to prices.

    Jobless claims for the week ended Dec.21 are expected to total 225,000, according to an estimate from Dow Jones. Claims for the prior week totaled 220,000.
    The benchmark 10-year rate has climbed more than 40 basis points this month. The bulk of the advance came after the Federal Reserve pared down rate-cut projections, indicating only two more interest rate cuts in 2025, down from the four potential cuts penciled in during September. More

  • 150 Shares169 Views

    in Business

    More than 900 American Airlines flights delayed after glitch briefly grounded planes

    American briefly grounded U.S. flights on Tuesday.
    The carrier said a technical problem stemmed from a hardware issue with a third-party platform.
    The ground stop lasted about one hour but more than 900 American flights were delayed.

    American Airlines planes sit by their gates at the Miami International Airport on October 25, 2024 in Miami, Florida.
    Joe Raedle | Getty Images

    American Airlines briefly grounded its U.S. flights Tuesday morning due to a technical problem, snarling travel during what carriers expect to be a period of record demand for the holidays.
    By 7:55 a.m. ET, the ground stop had been lifted, an American Airlines spokeswoman told CNBC. The ground stop lasted for less than an hour but more than 900 American Airlines mainline flights had been delayed, according to flight-tracking site FlightAware. That was more than 38% of American’s schedule for Tuesday, and more delays than any other U.S. carrier. Only 11 mainline flights were canceled, however.

    The airline’s subsidiary regional carrier Envoy also reported another 200 delayed flights. In addition to the earlier ground stop, American was also facing thunderstorms in the Dallas-Fort Worth area, where its biggest hub is located.
    The problem was a network hardware issue involving a platform using DXC Technology, a vendor that maintains the flight operating system that lets flights leave the gate, American said in a statement.
    The system is tied to critical data like an aircraft’s weight and balance, which is required before a flight can leave the gate.
    “That issue has been resolved and flights have resumed,” the carrier said in a statement. “We sincerely apologize to our customers for the inconvenience this morning.”
    The Federal Aviation Administration said American had requested the ground stop.

    Airlines routinely request ground stops, which hold flights at origin, so that destination airports aren’t overwhelmed by flights with nowhere to park when there are disruptions. In addition to technical problems, ground stops are put in place for thunderstorms and other severe weather.
    American was operating a smaller schedule on Christmas Eve compared with other days around the Christmas holiday. The carrier didn’t have any cancellations tied to the issue, a spokeswoman said.
    Airlines’ patchwork systems of critical technology platforms have gained more attention lately after periods of mass flight cancellations such as Southwest’s meltdown during the 2022 year-end holiday season and Delta’s struggle to recover from the CrowdStrike outage this past summer.
    Correction: The ground stop was issued Tuesday. An earlier version misstated the timing.

    Don’t miss these insights from CNBC PRO More

  • 150 Shares199 Views

    in Finance

    Biggest banks planning to sue the Federal Reserve over annual stress tests

    A general view of the Federal Reserve Building in Washington, United States.
    Samuel Corum | Anadolu Agency | Getty Images

    The biggest banks are planning to sue the Federal Reserve over the annual bank stress tests, according to a person familiar with the matter. A lawsuit is expected this week and could come as soon as Tuesday morning, the person said.
    The Fed’s stress test is an annual ritual that forces banks to maintain adequate cushions for bad loans and dictates the size of share repurchases and dividends.

    After the market close on Monday, the Federal Reserve announced in a statement that it is looking to make changes to the bank stress tests and will be seeking public comment on what it calls “significant changes to improve the transparency of its bank stress tests and to reduce the volatility of resulting capital buffer requirements.”
    The Fed said it made the determination to change the tests because of “the evolving legal landscape,” pointing to changes in administrative laws in recent years. It didn’t outline any specific changes to the framework of the annual stress tests.
    While the big banks will likely view the changes as a win, it may be too little too late.
    Also, the changes may not go far enough to satisfy the banks’ concerns about onerous capital requirements. “These proposed changes are not designed to materially affect overall capital requirements, according to the Fed.
    The CEO of BPI (Bank Policy Institute), Greg Baer, which represents big banks like JPMorgan, Citigroup and Goldman Sachs, welcomed the Fed announcement, saying in a statement “The Board’s announcement today is a first step towards transparency and accountability.”

    However, Baer also hinted at further action: “We are reviewing it closely and considering additional options to ensure timely reforms that are both good law and good policy.”
    Groups like the BPI and the American Bankers Association have raised concerns about the stress test process in the past, claiming that it is opaque, and has resulted in higher capital rules that hurt bank lending and economic growth.
    In July, the groups accused the Fed of being in violation of the Administrative Procedure Act, because it didn’t seek public comment on its stress scenarios and kept supervisory models secret.
    CNBC’s Hugh Son contributed to this report. More