Federal Reserve Unveils 2025 Bank Stress Test Scenarios
The scenarios evaluate resilience against severe economic downturns, including rising unemployment, collapsing asset prices, and exploratory shocks in non-bank sectors.
- The 2025 stress test includes a 'severely adverse scenario' with U.S. unemployment rising from 4.1% to 10%, a 33% drop in home prices, and a 30% decline in commercial real estate values.
- This year’s test will assess 22 large banks, including JPMorgan Chase, Bank of America, and Citigroup, against hypothetical global recession conditions and market shocks.
- For the first time, exploratory scenarios will examine risks from non-bank financial sector credit and liquidity shocks, as well as the failure of five major hedge funds.
- The Federal Reserve plans to reduce stress test result volatility and improve transparency, with public comment on comprehensive changes expected later this year.
- Stress test results and exploratory analysis outcomes will be published in June, with corresponding capital buffer requirements finalized in the summer.
American Banker 
