Large U.S. Banks Meet Capital Requirements to Weather a Severe Recession
The results of the Federal Reserve Board’s annual bank stress test released Thursday, June 23rd showed that “banks continue to have strong capital levels, allowing them to continue lending to households and businesses during a severe recession.” According to the Fed’s press release, despite total projected losses of $612 billion, all 34 banks with more than $100 billion in assets that the Fed oversees and tested remained above their minimum capital requirements. The 2022 hypothetical scenario is tougher than the 2021 test, by design, and includes a severe global recession with substantial stress in commercial real estate and corporate debt markets. The results that serve as a sign of the sector’s strong financial health, were hailed by the country’s largest banking group.
Source: https://www.federalreserve.gov/newsevents/pressreleases/bcreg20220623a.htm