Nation's largest banks pass annual Fed stress test Nation's largest banks pass annual Fed stress test
The
The stress-test scenarios are created annually by the Fed, along with the
The tests determine whether those banks have enough capital to weather a significant economic downturn.
Among the affected banks are Bank of America Corp.,
Typically, banks disclose dividend and share-repurchase plans within weeks of gaining Fed permission.
The current quarterly dividends are
The 34 banks collectively represent more than 80% of domestic banking assets.
All banks tested remained above their minimum capital requirements, despite total projected losses of
The board said stress tests "help ensure that large banks can support the economy during economic downturns."
The tests evaluate the resilience of large banks by estimating their capital levels, losses, revenue and expenses under hypothetical scenarios over nine future quarters.
This year's hypothetical scenario was considered by the Fed and banking analysts as tougher than the 2021 test, by design.
The scenario included: a severe global recession with substantial stress in commercial real estate (down 40%) and corporate debt markets; unemployment rate rises by 5.75% to a peak of 10% with the
For stress-test purposes, commercial real estate loans are for offices, hotels in urban locations or locations that tend to attract business travelers, shopping malls and strip malls, according to the
"The individual bank results from the stress test will factor directly into a bank's capital requirements, mandating each bank to hold enough capital to survive a severe recession," the Fed said.
"If a bank does not stay above its capital requirements, it is subject to automatic restrictions on capital distributions and discretionary bonus payments."
Individual bank scenarios
Truist projected a
Of the
It estimated
Of the
Bank of America projected an overall
It estimated
Of the
PNC projected an overall
It estimated
Of the
TD projected an overall
It estimated
Of the
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