All big US banks pass Fed’s annual ‘stress tests’

FILE PHOTO: The Federal Reserve Board building on Constitution Avenue is pictured in Washington, U.S., March 27, 2019. REUTERS/Brendan McDermid

NEW YORK (AP) — The nation’s 3 biggest banks have enough capital to withstand a severe economic contraction.

That’s according the Federal Reserve’s latest annual “stress tests” of the U.S. financial system.

The Fed built a scenario under which the nation’s unemployment rate would more than double to 10 percent, and a severe contraction in commercial real estate and stock market values would cause losses of more than $600 billion.

The Fed said that even in with those variables, the 33 largest banks would still on average have a capital ratio 9.7 percent, well above the 4.5 percent

required by law.

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