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Federal Reserve Stress Test: U.S. Banks Could Withstand Over $700 Billion in Losses in the Event of an Economic Collapse
① The latest stress test results from the Federal Reserve indicate that large U.S. banks could absorb over $708 billion in potential losses under a severe economic downturn while maintaining their ability to lend; ② In the test, the banking sector’s Common Equity Tier 1 (CET1) capital ratio declined by an average of 1.6 percentage points but remained well above the regulatory minimum requirement; ③ Unlike in previous years, this year’s stress test results do not affect banks’ capital distributions.
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