Stress test results intended to show whether banks are sufficiently capitalized to absorb losses and continue lending even in a hypothetical severe recession will be released by the Federal Reserve Board at 4:30 p.m. ET on June 24, according to a release Monday.
The Fed said the 2021 process tested the resilience of large banks against a hypothetical recession featuring a severe global downturn with substantial stress in commercial real estate and corporate debt markets. It said banks with large trading operations were to be tested against a global market shock component that stresses their trading, private equity, and other fair value positions; and banks with substantial trading or processing operations were to be tested against the default of their largest counterparty.
Nineteen banks with more than $100 billion in total consolidated assets were subject to the Fed Board’s stress tests this year. Smaller banks also subject to stress tests only need to participate every other year, but four of those opted in voluntarily to the 2021 stress tests: BMO Financial Corp., MUFG Americas Holdings Corporation, RBC US Group Holdings LLC, and Regions Financial Corporation.
All the banks subject to stress tests participated last year, it said.
The over-$100 billion institutions in this year’s stress tests include:
- Bank of America Corporation
- The Bank of New York Mellon Corporation
- Barclays US LLC
- Capital One Financial Corporation
- Citigroup Inc.
- Credit Suisse Holdings (USA), Inc.
- DB USA Corporation
- The Goldman Sachs Group, Inc.
- HSBC North America Holdings Inc.
- JPMorgan Chase & Co.
- Morgan Stanley
- Northern Trust Corporation
- The PNC Financial Services Group, Inc.
- State Street Corporation
- TD Group US Holdings LLC
- Truist Financial Corporation
- UBS Americas Holding LLC
- U.S. Bancorp
- Wells Fargo & Company
The Fed, in announcing this year’s stress test scenarios, said the scenarios were not forecasts and that the severely adverse scenario “is significantly more severe than most current baseline projections for the path of the U.S. economy under the stress testing period.”