Off the wire
• Peru's president-elect to unveil cabinet on July 10  • Spotlight: Britain, EU relation on knife-edge as historic referendum closes  • More funds needed for relief efforts to aid Iraqis fleeing Fallujah fight  • Hubble space telescope to operate until 2021: NASA  • 3rd LD Writethru: Colombian gov't, FARC rebels sign historic ceasefire agreement  • 1st LD Writethru: U.S. Supreme Court rules in favor of affirmative action program  • Canadian stocks surge as UK votes in Brexit referendum  • Climate summit in November to push implementing Paris Agreement: Morocco's FM  • Chicago agricultural commodities close lower  • 2nd LD: Colombian gov't, FARC rebels sign historic ceasefire agreement  
You are here: 　 Home

Large U.S. banks have enough capital to withstand severe recession, Fed says

Xinhua, June 24, 2016 Adjust font size:

The largest U.S. banks have improved their capital levels and strengthened their ability to withstand a severe recession, according to the results of supervisory stress tests released by the Federal Reserve on Thursday.

A total of 33 largest U.S. banks participated in the stress tests, and these banks would incur 385 billion U.S. dollars of loan losses in total over a period of nine quarters under the most severe scenario, said the central bank said in a statement.

These banks' aggregate common equity tier 1 capital ratio, which compares high-quality capital to risk-weighted assets, would fall to a minimum level of 8.4 percent in the stress scenario, well above the minimum requirement set by regulators.

This is the sixth round of stress tests led by the Fed since 2009. The 33 banks represent more than 80 percent of the U.S. domestic banking assets, said the Fed.

The Fed will announce the second part of the stress tests' results, known as CCAR, on June 29. The Comprehensive Capital Analysis and Review (CCAR) is an annual exercise to evaluate the capital planning process and capital adequacy of large banks. The CCAR results could affect banks' buyback and dividend plans. Endit