The Fed tested the 34 largest banks operating in the United States, looking at how their balance sheets would withstand sharp drops in asset prices and a total of $612 billion in losses, caused mostly by stress in commercial real estate values and in the markets for corporate debt
The largest banks in the United States are well capitalized and could weather a severe economic downturn, Federal Reserve officials said Thursday after an annual review of the big banks’ resilience. The tests took on new significance as some economic indicators, such as slowing home sales and rising interest rates, appeared to increase the likelihood of a recession in the near future.
The Fed tested the 34 largest banks operating in the United States, looking at how their balance sheets would withstand sharp drops in asset prices and a total of $612 billion in losses, caused mostly by stress in commercial real estate values and in the markets for corporate debt. Each bank had enough capital to meet regulators’ minimum requirements, even in the worst-case scenario.
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