WASHINGTON– The 31 largest banks in the United States passed the Federal Reserve’s annual stress test, designed to evaluate how they would respond in a situation of financial crisis, the US central bank reported this Wednesday.
The test exposed the banks, through a simulation model, to a global recession scenario with a 40% drop in prices in the commercial real estate sector, a 36% drop in housing prices and a spike in the interest rate. unemployment.
“This year’s stress test shows that large banks have enough capital to withstand a high-pressure scenario and maintain their minimum capital ratios,” Fed Vice Chairman of Supervision Michael Barr said in a statement.
In any case, despite it being a similar test to last year, it “resulted in greater losses” for the banks, he added.
Banks would be penalized by increased consumer use of credit cards, which would be accompanied by a higher default rate.
The simulated total reached $685 billion in losses. In 2023 the data showed 541,000 million, but considering 23 banks and not 31 like this year.
Some banks pass this test every two years.
Source: AFP
