Fed's stress test shows nation's top banks could withstand $410 billion of losses

Published: June 21, 2019 4:33 p.m. ET

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The nation's largest banks have enough capital to withstand a severe recession, the Federal Reserve said Friday. The so-called stress tests showed that 18 big banks including Bank of America BAC, -0.94%, JPMorgan Chase JPM, -0.69% and Citi C, -0.68% could absorb a cumulative $410 billion of losses, with a global recession and the U.S. unemployment rate rising by more than 6 percentage points, the Fed said. The firms' aggregate common equity tier 1 capital ratio, which compares high-quality capital to risk-weighted assets, would fall from an actual level of 12.3% in the fourth quarter of 2018 to a minimum level of 9.2%. Next week the Fed will say whether the banks can make the share buybacks and dividend payments they want to give to shareholders.