Overview

• The Fed simulated a severe global recession with a 30% plunge in commercial real estate prices, a 33% drop in home values, and unemployment rising to 10%.
• Projected losses exceeded $550 billion, including $158 billion from credit card defaults and $124 billion in commercial loan write-downs.
• Institutions sustained an average Common Equity Tier 1 ratio of 11.6%, more than double the 4.5% minimum despite a 1.8 percentage-point decline under stress.
• Clearing the tests unlocks imminent plans for major banks to raise dividends and initiate share repurchases.
• The Federal Reserve is weighing a proposal to average two consecutive years of results and will solicit public input to address concerns over milder scenarios and the exclusion of private credit risks.