Fed’s Stress Tests Show Banking System is “Strongly Positioned”

Article originally posted on HERE on June 29, 2021

Several of the nation’s largest banks said Monday that they would increase their dividends following the results of this year’s stress tests by the Federal Reserve Board. All 23 institutions that underwent testing remained well above their risk-based minimum capital requirements.

Earlier, the Fed announced that test results show large banks continue to have strong capital levels and could continue lending to households and businesses during a severe recession. “Over the past year, the Federal Reserve has run three stress tests with several different hypothetical recessions and all have confirmed that the banking system is strongly positioned to support the ongoing recovery,” said Randal K. Quarles, vice chair for supervision at the Fed.

The Fed said that additional restrictions put in place during the COVID event will end. All large banks will be subject to the normal restrictions of the Fed’s stress capital buffer, or SCB, framework.