Fed stress tests let Goldman Sachs raise dividends

The Federal Reserve's stress tests have allowed Goldman Sachs to increase its dividend by 33% to $4 per share, signaling a shift towards higher shareholder payouts. The Fed's stress tests, designed to assess banks' ability to withstand market shocks, showed Goldman Sachs would only "lose" $300 million in a severe scenario, significantly less than last year's projected $18 billion. This led to a lower capital requirement for Goldman, and a wave of dividend increases and share buybacks. The stress tests evaluate banks' resilience to economic downturns. Goldman's improved performance reflects efforts to reduce risky investments and technical changes in the tests, benefiting major Wall Street banks.