All big banks pass latest Federal Reserve ‘stress tests’

NEW YORK (AP) — All 23 of the nation’s biggest banks are healthy enough to withstand a sudden economic catastrophe, the Federal Reserve said Thursday, releasing the results from its latest “stress tests.” It gives the banks the green light to start paying out dividends to investors and start buying back their stock. This year’s harshest test, known as the “severely adverse scenario,” involved a hypothetical global recession lasting from late 2020 to September 2022, causing the U.S. economy to contract 4%. Unemployment would jump to 10.75%, and stock prices would fall 55%. Even under this scenario, all banks would have enough capital to continue to operate with room to spare.