Fed stress test shows 32 largest U.S. banks can withstand $708 billion in losses

RegulationMacro
โดย CNBC·Read original
Summary · why it matters

The Federal Reserve's annual stress test found that the 32 largest U.S. banks could absorb more than $708 billion in losses under a severe global recession scenario while continuing to lend. The hypothetical scenario included unemployment surging to 10%, a 39% drop in commercial real estate prices, and a 30% decline in home prices. The industry's common equity tier 1 capital ratio fell by 1.6 percentage points but remained well above required minimums, with projected losses including roughly $200 billion from credit cards, $160 billion from commercial and industrial loans, and $75 billion from commercial real estate. Federal Reserve Vice Chair for Supervision Michelle Bowman said the results underscore the strength of the banking system. Unlike previous years, the results will not affect capital requirements until 2027 as regulators rework the methodology, and KBW analysts noted that banks are more focused on the pending Basel III Endgame proposal.

Impact on stocks 5

Financials▲ · 3 stocks
Citizens Financial Group, Inc.
CFG
▲ PositiveRegulationrelevance

Stress test results show Citizens Financial can withstand severe losses, affirming capital strength and delaying capital requirement changes until 2027.

KeyCorp
KEY
▲ PositiveRegulationrelevance

Stress test results show KeyCorp can withstand severe losses, affirming capital strength and delaying capital requirement changes until 2027.

Morgan Stanley
MS
▲ PositiveRegulationrelevance

Stress test results show Morgan Stanley can withstand severe losses, affirming capital strength and delaying capital requirement changes until 2027.

Digital Finance & Tokenization▲ · 2 stocks
Citigroup Inc.
C
▲ PositiveRegulationrelevance

Stress test results show Citigroup can withstand severe losses, affirming capital strength and delaying capital requirement changes until 2027.

JPMorgan Chase & Co
JPM
▲ PositiveRegulationrelevance

Stress test results show JPMorgan Chase can withstand severe losses, affirming capital strength and delaying capital requirement changes until 2027.

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