Fed stress tests show U.S. banks endure $708B hit but stay above capital
The Federal Reserve’s annual stress tests project that the 32 largest U.S. banks could absorb roughly $708 billion in losses in a severe downturn yet remain above required capital levels; major banks like JPMorgan Chase, Goldman Sachs, and Morgan Stanley passed and subsequently boosted dividends or authorized buybacks. The modeled scenario includes a global recession, 10% unemployment and a 30% drop in home prices, with losses mainly tied to credit cards, commercial real estate and corporate lending. The results are less market-moving this year as last year’s stress capital buffers are frozen pending review, in a regulatory environment also shaped by Basel Endgame reforms and broader supervision restructuring.
