All 32 US Banks Pass Federal Reserve Stress Test
The US Federal Reserve tested all 32 of its largest banks. Every bank passed the annual stress test.
The test checks if banks can survive a severe recession. Banks were tested against over $708 billion in projected losses.
All banks stayed above the minimum required capital levels. Results showed banks can keep lending to households and businesses.
Banks that pass can increase payouts to shareholders. JPMorgan Chase announced a $50 billion share buyback after passing. Goldman Sachs also raised its dividend payment.
Klear Note — The Federal Reserve runs this stress test every year to ensure banks stay stable. Banks must hold enough money to survive severe economic downturns and keep lending.
Key Terms 5
- Federal Reserve The US central bank that oversees and regulates other banks
- stress test A check to see if banks can survive a financial crisis
- recession A period when the economy shrinks and jobs are lost
- buyback When a company buys its own shares back from investors
- dividend A payment a company makes to its shareholders from profits