On Wednesday, the central banking system of the United States Federal Reserve released results of the second round of its stress tests called 'Comprehensive Capital Analysis and Review (CCAR)'. The stress tests included 31 big banks that are currently operating in the U. S. market.

While two foreign banks, Santander and Deutsche Bank, failed the tests, the remaining banks managed to pass the second round. According to reports, the result was not as bad as analysts had predicted.

Another bank, Bank of America, which somehow passed the test, was put on a 'warning' by the central banking system of the country. The multinational banking and financial services corporation headquartered in Charlotte was found to have some weaknesses in aspects of revenue modeling.

According to the reports, Santander and Deutsche Bank, which have failed the tests, face severe consequences. Santander, owned by the Spanish Santander Group, has recently announced senior management changes in the United States, while Deutsche is under pressure to do the same.

Although majority of the United States banks have passed the second round of the stress tests, the results could have been still worse for the banks operating in the county. JPMorgan, Goldman Sachs and Morgan Stanley were at the risk of failing at the first round of the tests. After the first round results released on March 5, the banks resubmitted their plans, cut back on dividends.

According to the Federal Reserve, the test has shown that equality-capital ratio had grown to 12.5% in fourth quarter of 2014 from 5.5% since stress testing started in 2009. As per some reports, the stress tests have made banks more resilient, but the banks are also forced to down profits due to the tests. The average return on equity of the banks tested is currently just 8%, which is much lesser than before the financial crisis.