DPST - Even Smooth Bank Stress Test Results Fray Nerves
2024-07-01 09:35:00 ET
Summary
- Of the 31 banks that underwent stress tests, all emerged with their common equity Tier 1 capital above the required minimum.
- The test showed banks would experience $684 billion of total losses, but all remained at or above their minimum required levels of capital.
- The near-$300 billion of capital they hold that’s surplus to the required amount must be burning a hole in the banks’ pockets.
By Breakingviews
The annual stress tests that banks undergo are supposed to soothe nerves. This year they’ll probably jangle them. The 31 large U.S. lenders put through their paces by the Federal Reserve sailed through , showing capital levels that remained sound even under theoretical spikes in unemployment, plunging real estate prices, and market routs. The near-$300 billion of capital they hold that’s surplus to the required amount must be burning a hole in their pockets....
Even Smooth Bank Stress Test Results Fray Nerves