The easiest bank stress tests show the way to the presence of stocks and re -purchases

The Federal Reserve said that all the 22 banks tested this year will remain a solvent and above the minimum thresholds to continue work, despite the absorption of nearly $ 550 billion of theoretical losses. In the federal reserve scenario, there will be a lower rise in unemployment, less than severe economic shrinkage, less than the decrease in commercial real estate prices, less than a decrease in housing prices, among other standards compared to what they tested in 2024.

All of these least damaged drops, but simulation, means that there will be less damage to the public group of these banks and less risks than these banks that are likely to be a failure. Since banks have passed the 2024 tests, banks were expected to pass the 2025 tests.

“The large banks are still drawing and flexibility in a set of severe results,” said Michelle Bowman. One of those appointed to President Trump, Bowman became Vice President of the Federal Reserve to supervise earlier this month.

The Federal Reserve said it went with a less powerful test because the global economy has weakened since last year, and thus the test tends to be weak. Moreover, the bank said that previous tests showed “unintended fluctuations” in the results and planned to request a general and industrial suspension to control stress tests in the coming years. The Federal Reserve also chose not to test banks significantly on their exposure to private stock assets, on the pretext that private stock assets are usually kept in the long run and are not usually sold in times of distress.

The Federal Reserve also did not experience any private credit bank, a $ 2 trillion assets category The researchers in the Federal Reserve noticed that themselves grow quickly. Boston’s Federal Reserve recently referred to this Private credit can be a systematic risk of financial system In light of a severe negative scenario, which is exactly what is supposed to test stress tests.

There was no drafting or formulation in the press release of the Federal Reserve, or reports or methodology about the special credit or debt or debts in this year’s test. The Federal Reserve did what it calls an “exploratory analysis” of the private credit market, which concluded that the main banks “were in a good position” to bear the losses in the private credit market. This analysis was completely separate and not part of this year’s test.

“Stress tests” were created at the Federal Reserve after the 2008 financial crisis as a way to measure whether the “very large banks that fail” can withstand another financial crisis, such as what happened almost 20 years ago. The tests are actually an academic exercise, as the Federal Reserve simulates a scenario in the global economy and measures what this scenario will do for the public banking public.

22 banks that have been tested are the biggest names at work, such as Jpmorgan Chaseand Citigroupand Bank of Americaand Morgan Stanley The Goldman Sachs, which carries hundreds of billions of dollars in assets and has widespread work that comes into contact with every part of the American economy and the global economy.

Under the virtual scenario for this year, the main global recession had caused a 30 % decrease in commercial real estate prices and a 33 % decrease in housing prices. The unemployment rate will increase to 10 % and the stock price will decrease by 50 %. In 2024, the virtual scenario decreased by 40 % in commercial real estate prices, stock prices decreased by 55 % and a decrease in 36 % in housing prices.

Through their passing degrees, the main banks will be allowed to issue stock profits for shareholders and buy stock shares to return the returns to investors. The profit plans will be announced next week.