Washington: The US Federal Reserve announced that major American banks have sufficient capital to endure a severe economic downturn while continuing to lend to households and businesses. All 22 banks subjected to this year's annual stress tests passed, demonstrating resilience under simulated adverse economic scenarios.
According to Bahrain News Agency, the banks could absorb losses exceeding $550 billion and still hold more than double the minimum required capital, highlighting their financial strength. Michelle Bowman, Vice Chair for Supervision, stated that the banks remain well-capitalized and capable of withstanding various economic challenges.
This year's stress test scenario assumed a global recession affecting residential and commercial real estate markets and corporate debt. These tests were introduced after the 2008 financial crisis and are conducted annually for banks with assets over $100 billion, while smaller institutions are tested every two years.