The stress tests that large banks must go through each year make it easier than ever for investors to get a sense for how safe a particular bank stock may or may not be. U.S. Bancorp’s (NYSE:USB) performance on this year’s tests offers a case in point.
The stress tests were implemented in response to the financial crisis. Their purpose is to assess whether banks with more than $50 billion worth of assets on their balance sheet have enough capital to survive another crisis-like scenario without a government bailout.