Stress tests

Europe’s landmark test of banks’ resilience to global warming was far softer than many lenders had expected, according to people familiar with the matter.

This year’s stress-test results show large banks have more than enough capital to deal with a major economic crisis, but their capital requirements will likely go up anyway. That has some observers and industry officials concerned credit will tighten even as the economy teeters on the edge of recession.

Despite a more rigorous hypothetical stress scenario than last year, each of the 33 banks examined retained far more than their minimum capital requirements in this year’s stress-test results.

U.S. banking giants are poised to return $80 billion to shareholders after this year’s Federal Reserve stress tests, less than last year’s elevated level that followed a pandemic-driven buyback pause.

The Federal Reserve's models assume interest rates will decline if the economy falls into a recession, but as big banks prepare for their annual stress tests, they should also be considering the impact of rising rates and higher inflation on their operations.

The largest U.S. banks will be tested against a hypothetical massive surge in unemployment and a crash in commercial real estate in the Federal Reserve's annual stress tests, according to scenarios announced Thursday.

The European Central Bank is stepping up pressure on lenders to prepare for stress tests next year that will show just how vulnerable the industry is to climate change, according to people familiar with the process.

This year’s stress tests examined 23 banks including JPMorgan Chase and Goldman Sachs, with the remainder of the firms on an “every other year” test cycle. The capital requirements for those remaining firms are unchanged from last year.

Sixty-one percent of executives at large U.S. banks said their institution would be prepared to comply with the kind of testing now happening in the U.K., according to a new survey. But experts question whether bankers are underestimating the data-gathering challenges ahead.

Nine of the 12 largest banking companies in the U.S. proposed higher quarterly payouts to shareholders. In announcing the actions, the banks touted their strength after more than a year of economic dislocation.