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Goldman exposed to $20bn loss in a crisis

"Federal Reserve stress tests identified Goldman Sachs as one of the weaker financial groups on Wall Street but gave Citigroup confidence to announce a planned $1.2bn share buyback.

"The Fed’s annual assessment of how the biggest financial groups would withstand a severe financial crisis was positive for most US banks, paving the way for increased dividends and share buybacks.

"Seventeen out of 18 institutions passed stress tests in results announced on Thursday, with only Ally Financial failing to meet minimum capital levels in the hypothetical scenario of a deep global recession and a shock to markets.

"Citi was first to announce its distribution plan, including a $1.2bn buyback in the next 12 months, its biggest return of capital since 2006 and its $45bn government bailout during the financial crisis.

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