Bank of America (BAC), JPMorgan (JPM), Wells Fargo (WFC), Citigroup (C) Ordered to Take Stress Tests

Bank of America (NYSE:BAC), JPMorgan (NYSE:JPM), Wells Fargo (NYSE:WFC) and Citigroup (NYSE:C), along with 15 other banks, have been ordered by the Federal Reserve to conduct stress tests to see how their capital levels would respond if a double-dip recession were to occur, accompanied by an 11 percent unemployment rate.

The banks submitted their plans in January and the Federal Reserve will finish reviewing them in March, according to those familiar with the matter.

It appears these tests aren't only to find out the health of the banks in general, but in response to increased pressure to return capital to investors via dividends, which a number of the larger and healthier banks are proposing to do.

Fed Governor Daniel Tarullo, who together with Ben Bernanke, has put together a unit called the Large Institution Supervision Coordinating Committee, or LISCC, said, “The current review of firms’ capital plans is another step forward in our approach to supervision of the largest banking organizations. It has also served as an occasion for discussion in the LISCC of the overall state of the industry and key issues faced by banking organizations.”