Fed’s annual stress tests results due for release June 28; to feature commercial, residential real estate scenarios

Annual bank stress tests results – which featured a scenario of a global recession with heightened stress in commercial and residential real estate markets – will be released June 28 at 4:30 p.m. ET, the Federal Reserve said late Wednesday.

The results to be released June 28 will be from 23 banks assessed against the hypothetical global recession. Besides the real estate situations, the Fed said, the tests included additional exploratory market shock for the largest banks that tests them against greater inflationary pressures.

According to the agency, banks with $100 billion or more in total consolidated assets are subject to the stress tests, with larger banks required to participate annually; and banks with $100 billion to $250 billion in total assets are required to participate every other year.

The tests are intended to measure whether banks have adequate capital to absorb losses so that they can lend to households and businesses even in a severe recession, the Fed said. The tests evaluate banks’ resilience by estimating losses, net revenue, and capital levels – which provide a cushion against losses – under the hypothetical recession scenario, the agency said.

Federal Reserve Board announces that results from its annual bank stress tests will be released on Wednesday, June 28, at 4:30 p.m. EDT