All big US banks pass Fed’s annual ‘stress tests’
Associated PressNEW YORK — The nation’s 33 biggest banks have enough capital to withstand a severe economic contraction, the Federal Reserve said Thursday. In its latest annual “stress tests” of the U.S. financial system, the Fed built a scenario under which the nation’s unemployment rate would more than double to 10%, and a severe contraction in commercial real estate and stock market values would cause losses of more than $600 billion. The “stress tests” have become an annual report card for the nation’s financial system since being implemented after the Great Recession and 2008 financial crisis. The Fed’s test is an academic exercise, and this examination is not predicting a recession, even though financial markets have increasingly priced in the possibility of a recession later this year as the nation’s central bank raises rates to combat inflation.
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