Investment Banking

Biggest banks can withstand severe downturn, $685bn in losses, US Fed says

Latest stress tests find banks remained above minimum capital requirements

Thursday 27 June 2024 at 06:52

Michael Barr, vice chairman for supervision at the Federal Reserve
Michael Barr, vice chairman for supervision at the Federal Reserve Photo: Allison Robbert/Bloomberg News

Big US banks passed their latest annual stress test, with the Federal Reserve finding they would be able to continue lending to households and businesses in a severe recession, even while suffering steeper losses than last year’s tests.

This year’s exercise measured the 31 biggest banks’ ability to maintain strong capital levels in a hypothetical recession marked by double-digit unemployment and a severe stock-market decline.