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Tougher Stress Tests Are No Big Strain for Banks

·1 min

Banks’ performance on this year’s Federal Reserve stress test was worse, but it may not have as much impact on their progress as in the past. In the Fed’s hypothetical scenario, which included a rise in unemployment and a drop in commercial real-estate prices, the key capital ratio for large U.S. lenders declined from 2.5 percentage points in the 2023 exam to 2.8 percentage points in the 2024 test.