Fed Says 32 U.S. Banks Can Absorb $708 Billion in Losses as Capital Stays Above Minimums
Updated
Updated · CNBC · Jun 24
Fed Says 32 U.S. Banks Can Absorb $708 Billion in Losses as Capital Stays Above Minimums
3 articles · Updated · CNBC · Jun 24
Summary
$708 billion in projected losses would still leave all 32 banks above minimum capital requirements in the Federal Reserve's 2026 stress test, allowing them to keep lending through a severe global recession.
The scenario assumed unemployment jumping to 10%, commercial real estate prices falling 39% and home prices dropping 30%; the industry's common equity tier 1 ratio fell 1.6 percentage points but stayed comfortably above required levels.
About $200 billion of the modeled losses came from credit cards, $160 billion from commercial and industrial loans, and $75 billion from commercial real estate, highlighting where the Fed sees the biggest downturn risks.
This year's results carry less immediate regulatory weight because the Fed froze stress-test capital buffers until 2027 while it rewrites the methodology, leaving banks more focused on the Basel III Endgame proposal due later this year.