New York CNN —America’s biggest banks are well positioned to survive a severe recession while continuing to lend to households and businesses, the Federal Reserve said Wednesday in its annual bank resilience test, commonly referred to as a stress test.
However, banks could suffer higher losses, if a significant economic downturn were to hit now versus a year ago.
As a result of the banking crisis that fueled the Great Recession, the Fed conducts stress tests to monitor and uncover potential signs of weaknesses in the financial system.
At the same time, banks’ income from fees was lower, giving them less of a buffer to absorb those losses.
“The goal of our test is to help to ensure that banks have enough capital to absorb losses in a highly stressful scenario.
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New York CNN —, they’ve, Michael Barr, “, ” Barr
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