(The Epoch Times)—All 22 of the largest U.S. banks have passed the Federal Reserve’s latest annual stress test, demonstrating their ability to withstand a hypothetical financial crisis and paving the way for potential increases in shareholder payouts.
In results released on June 27, the Fed said that under a “severely adverse” scenario—including a sharp global recession and surging unemployment to 10 percent—the banks would collectively suffer losses exceeding $550 billion. Despite such a heavy hit, their core capital buffers—measured by the common equity tier 1 capital ratio (CET1)—would fall by only 1.8 percentage points and still remain well above regulatory minimums.
On average, banks maintained a CET1 capital ratio of 11.6 percent, comfortably higher than the 4.5 percent regulatory floor. This capital ratio is critical because it acts as a cushion to absorb losses during severe downturns.
“Large banks remain well capitalized and resilient to a range of severe outcomes,” the Fed’s Vice Chair for Supervision, Michelle Bowman, said in a statement.
This year’s stress test scenario envisioned a steep global recession, featuring a 30 percent drop in commercial real estate prices, a 33 percent decline in house prices, and a nearly 6 percentage point spike in the unemployment rate to a peak of 10 percent. Economic output was projected to contract sharply under these conditions, which also assumed significant financial market turmoil, including a 50 percent plunge in equity prices and a sharp selloff in corporate bonds, with spreads on investment-grade debt widening to 5 percent.
Among the projected losses in this year’s stress test, credit card losses accounted for $157 billion, while losses on commercial and industrial loans totaled $124 billion, and commercial real estate loan losses reached $52 billion.
The stress test results play a critical role in determining the minimum capital levels banks must hold relative to their risk-weighted assets, serving as a key safeguard for financial stability. Many banks typically announce dividend plans and share buybacks shortly after the release of stress test results.
While severe, this year’s stress test scenario was somewhat less seismic than the 2024 version. This reflects the countercyclical design of the Fed’s stress testing framework, which becomes harsher during periods of economic growth and eases slightly when the economy is already under strain. The Fed also noted that year-to-year volatility in stress test results has been driven by model sensitivities and other factors, leading to fluctuations in projected capital requirements.
To address these fluctuations, the Fed is considering a rule that would average stress test results over two consecutive years. According to Bowman, this change aims to reduce “excessive volatility” and provide a more stable and reliable gauge of banks’ capital adequacy.
The proposed rule, which also includes easing regulatory reporting requirements, comes as the Trump administration pursues efforts to reduce regulatory burdens in support of economic growth and investment.
As part of this broader push, the Fed and other federal banking regulators announced plans this week to revise the enhanced supplementary leverage ratio, a key post-crisis safeguard that requires the largest global banks to hold capital against all assets, regardless of risk.
At a public board meeting on June 25, Fed governors voted 5–2 to advance a plan to replace the existing flat leverage buffer—which stands at 2 percent at the parent company level and 6 percent at the subsidiary level—with a variable buffer tied to each bank’s systemic risk score. The goal is to reduce regulatory disincentives for holding low-risk assets like U.S. Treasurys and to ensure banks can function effectively as intermediaries in the Treasury market, especially during periods of market stress when liquidity is vital.
Preparing for the Unexpected: Your Essential Partner in Health Readiness
In an increasingly unpredictable world—where supply chain disruptions, natural disasters, and global travel can leave us vulnerable to sudden health challenges—being prepared isn’t just smart; it’s essential.
That’s where Jase Medical steps in, offering innovative solutions that empower individuals and families to take control of their health with emergency medication kits designed for real-life scenarios. As someone who’s always advocated for proactive wellness, I was impressed by how Jase Medical combines expert medical guidance with convenient, customizable options to ensure you’re never caught off guard.
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What sets it apart? It’s fully customizable with 28 add-on options, including a specialized KidCase for children ages 2-11, making it ideal for families.
Whether you’re stocking up for home emergencies or preparing for remote adventures, the Jase Case provides peace of mind with medications that boast extended shelf lives—up to five years or longer when stored properly, with studies showing 90% potency retention even after 20 years.
For those on the move, the Jase Go travel med kit at $129.95 is a game-changer. Curated by physicians, it addresses over 30 common travel ailments, from digestive upsets to minor injuries, ensuring explorers, hikers, and globetrotters can handle health hiccups without derailing their plans.
And for targeted concerns, Jase Medical offers specialized kits like the UTI Kit ($99.95), which includes test strips and treatments for urinary tract infections, vaginal candidiasis, and even jock itch, or the Parasites Kit (starting at $199.95), featuring compounded Ivermectin and Mebendazole to combat internal and external parasitic infections.
But Jase Medical isn’t just about one-off kits; their Jase Daily service provides an extended supply of your ongoing prescriptions, supporting hundreds of medications for chronic conditions like diabetes, heart health, high blood pressure, mental health, and more. This ensures long-term preparedness, safeguarding against factory shutdowns or extreme weather that could interrupt your regular supply.
The process couldn’t be simpler or more reassuring. Start by customizing your order online, then benefit from a thorough review by a team of world-class physicians who ensure safety and accuracy. In most cases, prescriptions are issued after a quick consultation—sometimes just a call to clarify allergies or needs—and your kit arrives discreetly at your door. While they don’t accept traditional health insurance, many customers use HSA cards, and refills are available for added convenience.
What truly stands out is the real-world impact. As radio host Glenn Beck puts it, “The supply lines for antibiotics already are stressed to the max. Please have some antibiotics on hand… You can do it through Jase.”
One satisfied customer shared, “It could have been a nightmare. Instead, the best trip we’ve had,” after their kit turned a potential health crisis into a minor blip during a family vacation.
In a time when health uncertainties loom larger than ever, Jase Medical isn’t just selling products—it’s delivering empowerment. Don’t wait for the next disruption; visit Patriot.TV/meds today to build your personalized emergency plan and step into a more secure tomorrow. Your health, and your family’s, deserves nothing less.
