FT Alphaville » Citi didn’t fail – it just overreached, a little bit

Yes, we said they failed the Fed stress tests. But maybe it’s not quite so dire as it sounds.

First, remember that Citi’s tier one capital ratios only fell short by 0.1 per cent — they came in at 4.9 per cent rather than the 5 per cent minimum.

At DealBreaker, Matt Levine points out that this isn’t a failure of Citi’s current balance sheet, it’s a failure of the capital plans that Citi submitted to the Fed. Which, like most of its peers, included a plan to effectively decrease capital, presumably through share buybacks and higher dividends. Citi’s said it will submit a revised capital plan later in the year.

* username: rupertbu