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Federal Reserve Stress Test Shows Large Banks 'Well Positioned' to Ride Out Economic Downturn

BY MT Newswires | ECONOMIC | 06/25/26 05:03 AM EDT

05:03 AM EDT, 06/25/2026 (MT Newswires) -- The Federal Reserve Board's annual bank stress test showed that large banks are "well positioned" to endure a severe recession with strong ability to lend to households and businesses," the regulator said Wednesday.

In the hypothetical scenario of a global recession with a 39% drop in commercial real estate prices and a 30% decline in house prices, 32 banks showed ability to write off $708 billion in loan losses, but their capital only decreased 1.6 percentage points in total, which is above minimum requirements, the board said.

"Today's results underscore the strength of the banking system," Vice Chair for Supervision Michelle W. Bowman said.

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