NEW YORK (Reuters) - Goldman Sachs Group Inc's
Goldman said its Tier 1 common ratio would drop to a minimum of 8.6 percent under extremely stressed economic conditions, whereas the Fed projected that ratio would drop as low as 5.8 percent for the Wall Street bank.
In order to pass the Fed's stress test, 18 large U.S. banks had to meet a minimum Tier 1 common ratio of 5 percent.
Goldman and its Wall Street rival Morgan Stanley
Not all of Goldman's calculations resulted in higher capital ratios. Its total risk-based capital ratio fell to a minimum of 13.2 percent under its own analysis, whereas the Fed projected that ratio could fall to a minimum of 11.3 percent for Goldman.
Goldman also projected lower losses in a stress scenario, but noted that the stress test does not take into consideration actions that management could take to reduce expenses, such as cutting compensation.
(Reporting By Lauren Tara LaCapra; Editing by Gary Hill)