U.S. Fed 2022 Stress Test Results Suggest Banks Still Can Weather Severe Recession Comfortably

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Federal Reserve Board released the results of its annual supervisory bank stress test on Thursday, which assesses how large banks are likely to perform under a hypothetical recession over nine future quarters.

2022 stress test results suggest that banks continue to have strong capital levels, allowing them to continue lending to households and businesses during a severe recession and can weather severe downturn comfortably.

All banks tested remained above their minimum capital requirements, despite a projected combined $612 billion in losses under a hypothetical severe downturn. Even in this case, the banks still will be left with roughly twice the amount of capital required under the Fed requirements.

Major U.S. banks include Bank of America (NYSE:BAC), Citigroup (NYSE:C), JPMorgan (NYSE:JPM), Goldman Sachs (NYSE:GS), Morgan Stanley (NYSE:MS), and Wells Fargo (NYSE:WFC), among others.