All 22 of the largest U.S. banks have passed the Federal Reserve’s latest annual stress test, demonstrating their ability to withstand a hypothetical financial crisis and paving the way for potential increases in shareholder payouts.
In results released on June 27, the Fed said that under a “severely adverse” scenario—including a sharp global recession and surging unemployment to 10 percent—the banks would collectively suffer losses exceeding $550 billion. Despite such a heavy hit, their core capital buffers—measured by the common equity tier 1 capital ratio (CET1)—would fall by only 1.8 percentage points and still remain well above regulatory minimums.
