CONTACT: Barbara Hagenbaugh
(202) 457-8783
bhagenbaugh@fsforum.com
“Nation’s largest banks are highly capitalized and resilient.”
Washington, D.C. – Financial Services Forum President and CEO Kevin Fromer issued the following statement today after the Federal Reserve released the scenarios for its annual bank stress tests:
“The nation’s largest banks are highly capitalized and resilient. They have shown repeatedly – in both hypothetical stress tests, and in the real-life stress test of the pandemic – that they can and will support American households and businesses even in the face of a severe recession.
“We will review the scenarios, which every year have been more severe than the financial crisis.”
Additional Background:
Since 2009, Forum members have increased their Tier 1 capital, which acts as a cushion against sudden financial losses, by nearly 50 percent to $979 billion. U.S. bank capital requirements, meanwhile, continue to increase and are higher than that required of foreign banks around the globe.
The Federal Reserve conducts stress tests, a simulation to determine a large financial institution’s ability to support the economy even when faced with an economic crisis, at least once a year.
Learn More:
- To learn more about large bank capital – what it is, why it is important, and why it is essential to get the calibration right – watch our “Policy Cents” video, Large Bank Capital and the Economy.
- For more information on the increases in large bank capital and bank capital requirements, read Capital and the Nation’s Largest Banks.
- To read about what U.S. bank regulators have said about capital in the largest banks, view What They’re Saying.
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The Financial Services Forum is an economic policy and advocacy organization whose members are the chief executive officers of the eight largest and most diversified financial institutions headquartered in the United States. Forum member institutions are a leading source of lending and investment in the United States and serve millions of consumers, businesses, investors, and communities throughout the country. The Forum promotes policies that support savings and investment, financial inclusion, deep and liquid capital markets, a competitive global marketplace, and a sound financial system.