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Big banks all pass the Federal Reserve’s stress tests, but the tests were less vigorous this year

  • On Friday, the Federal Reserve announced that all 22 major banks passed its annual stress tests held in 2024, demonstrating solvency under severe conditions.
  • The Federal Reserve’s annual bank resilience evaluations, developed in response to the 2008 financial crisis, were scaled back this year due to a deteriorating global economic outlook, resulting in scenarios depicting less severe economic downturns.
  • The Fed simulated scenarios including a 33 percent housing price drop, 50 percent stock market fall, 10 percent unemployment rise, and $550 billion in theoretical bank losses.
  • Michelle Bowman, Vice Chair for Supervision, noted that major banks continue to have strong capital positions and maintain stability, and these banks will be permitted to announce dividend payments and share repurchase plans next week.
  • The results suggest U.S. banks are generally well positioned to withstand future recessions, although concerns remain regarding growing private credit risks excluded from this test.
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The Globe & Mail broke the news in Canada on Thursday, June 26, 2025.
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