All central banks passed the “stress tests” of the Federal financial system, the Central Bank said on Friday, but the test by the Central Bank was much smaller than it was in previous years.
All 22 banks rated this year would remain a solvent and more than the lower thresholds to continue operating, Fed said, despite taking approximately $ 550 billion in the theory of theory. In the Fed situation, there will be an increase in unemployment, less economic disruption, under the decline in commercial real estate prices, under the decline in housing prices, among other metrics compared to what they tried in 2024.
All of these harmless, but prepared, drops mean there would be little damage to these banking sheets and the minor risk of these failures. Since banks passed the tests of 2024, it was expected that banks would pass 2025 tests.
“Large banks remain a good capital and are successful with poor results,” said Michelle Bowman, vice -chairman of the bank for management, in a statement. President Trump's nominee, Bowman became vice -chairman of the Fed management earlier this month.
The Fed said it went with a small test because the global economy has weakened since last year, and thus the test is about to weaken. Additionally, the bank said the old tests showed “unintended fragility” in the results and plans to seek public opinion and industry to amend the tests of stress over the years to come. Fed also chose not to test the bank as on exposure to personal equity properties, stating that individual equilibrium properties are usually done for a long time and are not sold in times of trouble.
Fed also did not try for any bank exposure to a personal loan, a $ 2 trillion asset class which even Researchers fed themselves have observed that it is growing rapidly. Boston Federal Conservation Bank recently showed that Personal loans can be a systemic risk to the financial system Under adverse conditions, which are the tests of stress should be attempted.
There were no words or words in the release of media, reports or techniques about testing or testing personal debt or personal debt in this year's exam. The Fed did what it calls the “investigation analysis” of the personal loan market, which concluded the central bank “had a good chance” to withstand losses in the personal loan market. The analysis was quite different and not part of this year's test.
Fed “stress tests were created after the 2008 financial crisis as a method of testing if a” too big failed “bank could withstand another financial problem like that that occurred almost 20 years ago. Dimensions are a professional exercise, where the Fed mimics the situation in the global economy and weighs what the situation would do with the bank's balanced sheets.
22 banks that have been rated are big names in business, such as Jpmorgan Chase. Citigroup. Bank of America. Morgan Stanley and Goldman Sachs, which hold hundreds of billions of dollars in property and have many businesses that affect every part of America and the world economy.
Under this year's theory, the global economic decline would result in a 30%decrease in commercial real estate prices and a decrease in 33%. The unemployment rate will increase to 10% and the stock price will fall 50%. In 2024, the hypothetical condition was a decrease of 40% of commercial real estate, a decrease in 55% and a decrease in housing price.
Along with their passing class, the Central Bank will be allowed to provide dividends to shareholders and buy stock stock to bring revenue to investors. The dividend plans will be announced next week.