Federal Reserve: Largest US banks have enough capital to withstand economic disasters

The annual bank stress test results released by the Federal Reserve show that the largest banks in the United States have enough capital to withstand economic disasters, but also point out that risks on the banks' balance sheets are increasing. The test results indicate that even with a total assumed loss of approximately $685 billion, these large banks still meet the minimum capital requirements set by regulatory agencies. However, the Federal Reserve has warned that factors such as increasing credit card expected losses, growing risks in corporate credit card portfolios, as well as rising expenses and decreasing fee income are contributing to these risks. In addition, the test also considers scenarios such as a severe global economic recession, commercial real estate and housing price declines, and rising unemployment rates. This test result is closely watched as it depicts the performance of the largest banks in the United States during an economic downturn