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Federal Reserve releases bank stress test results

Joe Mont | June 24, 2016

Some good news from the Federal Reserve this week: U.S. banks seem to have enough cash on hand to weather a variety of unexpected economic calamities and downturns.

“The nation's largest bank holding companies continue to build their capital levels and improve their credit quality, strengthening their ability to lend to households and businesses during a severe recession,” say the results of supervisory stress tests announced by the Federal Reserve Board on June 23.

“Capital is important to banking organizations, the financial system, and the economy because it acts as a cushion to absorb losses and helps to ensure that losses are borne by shareholders,” a statement by the Fed added.

The most severe hypothetical scenario projected that loan losses at the 33 participating bank holding companies would...

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