Welcome to Industry Focus, the podcast that dives into a different sector of the stock market every day.

It's Monday, July 2nd, and today we're talking about Fed Financial Report Cards.

More specifically, how the nation's largest banks fared with the latest round of stress test,

what that means for their capital allocation plans, and ultimately what that means for you as an investor.

I'm your host Shannon Jones and I'm joined via Skype by financial specialist

slash guru Matt Frankel. Matt so great to be here with you on the show today.

Always good to be here.

Awesome, awesome.

So before we dive into the actual results of the stress test.

Let's just set the stage.

Let's talk about what exactly is a stress test,

and more importantly, why is it even done in the first place?

Sure.

Well, first, the important thing is who this actually applies to. This is only

this only applies to the biggest banks in the US so if you see like your

local credit union or a regional bank, chances are they're not subject to the stress tests.

These are part of the Dodd-Frank financial reforms that were enacted after the financial crisis.

And they're basically designed to ensure that the banks that are too big to fail

don't aren't in a position where they could fail.

So basically, it established what's called the definition of what we refer to as a siffy which

stands for a systemically important financial institution and these are the

biggest banks in the country the threshold for years has been set at 50

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