The largest US banks would survive a severe recession, the Fed’s ‘stress tests’ show

By KEN SWEET
AP Business Writer

NEW YORK (AP) — The nation’s 23 largest banks passed the Federal Reserve’s so-called stress tests this year, a sign that the nation’s banking system remains resilient despite the recent banking crisis that that led to the failure of three banks. But Wednesday’s results did show some relative weakness among the midsize banks and “super regional” banks, with some getting a passing grade with a smaller cushion than usual, an outcome that could raise eyebrows for investors and policymakers. In this scenario, the 23 largest banks would have collective losses of $541 billion and their capital ratios would fall from 12.4% to 10.1%. That’s comparable to previous years, the Fed said.