Banks cruise through Fed stress tests, earning capital break
By: Kyle Campbell | Published: 2025-06-27 20:51:00 | Source: www.nationalmortgagenews.com
Most of the country’s largest banks are poised to see flat or lower capital requirements next year after performing well in this year’s Federal Reserve stress test, but ongoing efforts to reform its annual exam practices could complicate how much lower those requirements will ultimately be.
Overall, banks registered their best performance since new stress testing protocols were rolled out in 2018, with a maximum aggregate decline in common equity Tier 1 capital of 1.8% under the test’s severe scenario, down significantly from an average of 2.8% last year.
It was also the lowest total loss rate on record since 2020, when banks were projected to lose 2.1% of their CET1 capital.
Fed Vice Chair for Supervision Michelle Bowman said the results demonstrate both the resilience of the…
