Stress Tests 2023 – JPMorgan Chase And Citigroup Are Big Bank Bargains

This year’s annual Federal Reserve Stress Test of 23 of the nation’s largest banks included some harsh criteria. As if a severe global recession with a 40% decline in commercial real estate prices, a substantial increase in office vacancies and a 38% decline in house prices was not tough enough, the Test included the unemployment rate rising by 6.4 percentage points to a peak of 10% and economic output declining commensurately.

Happily, each of the banks survived the most adverse scenario with capital levels above the regulatory minimum of 4.5%, with Fed Vice Chair Michael S. Barr stating, “Today’s results confirm that the banking system remains strong and resilient.”