Banking could be at historic turning point with successful stress tests

In early May of 2009, with the U.S. economy still losing hundreds of thousands of jobs a month, federal regulators announced the results of "stress tests" they had conducted on the country's beleaguered big banks. After simulating what would happen to banks in the case of another financial crisis, government officials revealed that the institutions were close to healthy.

"With the clarity that today's announcement will bring, we hope banks are going to get back to the business of banking," Treasury Secretary Timothy Geithner said then, trying to close the book on the banking crisis.

Those first stress tests were conducted amid financial and economic turmoil, during the early months of a new Obama administration that would seek and enact historic and sweeping new regulations of the banking industry.

Eight years later, the circumstances facing the financial sector have undergone a nearly complete cycle. Stocks are at all-time highs, the unemployment rate is the lowest it has been since 2001, and home prices have mostly recovered. For the first time, all of the big banks that were tested cleared the stress tests, leading the banking industry to declare itself safe and call on the government to ease the burden of new regulations. The new Trump administration has set a goal of rolling back many of the new rules, and many of the factors it would need for success are in place.

Last month, the Treasury Department printed a report detailing a list of proposals for undoing parts of the 2010 Dodd-Frank financial reform law and other financial guardrails.