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Fed Proposes Annual Stress Tests for US Banks: Report

The Federal Reserve has proposed a new rule that will subject U.S. banks to annual "stress tests," Justin Baer of The Financial Times told CNBC's "Fast Money" on Tuesday.

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Under the rule, the Fed would reserve the right to veto dividend pay-outs if the banks failed to pass the tests.

The Fed oversees Wall Street's largest banks, such as Citigroup , Bank of America , JPMorgan Chase , Wells Fargo and Goldman Sachs .

The rule has yet to be approved by the Fed and it will be put out for public comment within weeks, according to the FT.