As many as half of the large banks including J.P. Morgan Chase Bank (JPM, quote), that just reported a earnings beat, failed the Government  Accountability Office's or GAO's Living Will Test.  That 4 out of the 8 largest banks here in the U.S.

The Living Will Test is designed to test if the bank were to go bankrupt it would not disrupt the financial system.  This very well could bring on additional regulator tightening shortening the government leash on these banks.

The test falls under the Dodd-Frank Act providing the regulators the power to force the banks to redo their plans to meet the criteria and even the possibility hurting the both consumer and market confidence in these banks.

The other 3 banks listed in the report are Wells Fargo (WFC, quote), Bank of New York Mellon (BK, quote) and State Street (STT, quote).

To read the entire GAO report Click Here