(Reuters) – Goldman Sachs has lodged an enchantment with the U.S. Federal Reserve difficult its consequence within the regulator’s most up-to-date “stress test”, which is ready to power the financial institution to carry a higher quantity of capital, the Monetary Instances reported on Sunday, citing individuals aware of the matter. 

The Federal Reserve’s annual “stress test” train confirmed final month that the most important U.S. banks would have sufficient capital to face up to extreme financial and market turmoil however corporations confronted steeper hypothetical losses this 12 months as a result of riskier portfolios.

The examined banks total noticed losses of 17.6% to current mortgage balances on bank cards and amongst them Goldman Sachs recorded 25.4% in losses.

Goldman had one of many largest will increase in stress capital buffers (SCB) at 94 foundation factors.

How nicely a financial institution performs on the stress assessments dictates the dimensions of its stress capital buffer (SCB) – an additional cushion of capital the Fed requires banks to carry to climate a hypothetical financial downturn.

Goldman mentioned it’ll have interaction with its regulator to higher perceive why its SCB jumped.

“This increase does not seem to reflect the strategic evolution of our business and the continuous progress we’ve made to reduce our stress loss intensity,” CEO David Solomon mentioned in an announcement final month.

Goldman Sachs and the Federal Reserve didn’t instantly reply to requests from Reuters for touch upon the FT report.