The Federal Reserve released the results of its 2026 annual stress test on June 24, covering 32 large US banks [1, 2, 3, 4, 5, 6]. All banks passed the test, showing they hold enough capital to withstand a severe economic downturn scenario [1, 2, 3, 4, 5, 6].
The stress test scenario includes a global recession with unemployment at 10%, a 30% drop in housing prices, a 39% decline in commercial real estate values, and severe market turmoil [4, 5, 6]. Under this scenario, the combined hypothetical losses for the banks exceed $708 billion [3, 4, 5, 6].
Industry-wide, the average Common Equity Tier 1 (CET1) capital ratio fell from 12.8% to a low of 11.2% during the stress, well above the 4.5% regulatory minimum [4, 5, 6]. Credit card loan losses are projected at about $200 billion, commercial and industrial loans losses near $160 billion, and commercial real estate loan losses around $75 billion [4, 5, 6].
The stress test results will not change banks' capital requirements or stress capital buffers through 2027, while the Fed reviews its testing framework [1, 2, 3, 4, 5, 6]. Federal Reserve Vice Chair Michelle Bowman said today, "今日的結果突顯了銀行體系的韌性," underscoring the system's resilience [4].
Following the release, major banks announced dividend increases and share repurchase plans. JPMorgan Chase revealed a $50 billion share buyback program and raised its quarterly dividend by 10% to $1.65 per share. CEO Jamie Dimon said, "The Board's intended dividend increase is supported by our consistent investment in our business and strong financial performance. As always, we are prepared for a wide range of scenarios, including the hypothetical 2026 supervisory severely adverse scenario" [3, 4, 6].
Goldman Sachs raised its quarterly dividend 11% to $5 per share [3, 4, 6]. Wells Fargo plans to boost its quarterly dividend by 11%, and Morgan Stanley reauthorized a $20 billion multi-year share repurchase program [4, 6]. U.S. Bancorp intends to increase its quarterly dividend 3.8%, from $0.52 to $0.54 per share, subject to board approval [5]. U.S. Bancorp CEO Gunjan Kedia said, "信任是根本，而這在不確定時期更受考驗。美國合眾銀行具備長期的專注、嚴謹的風險管理以及堅韌的商業模式，使其能夠應對廣泛的經濟情境並持續服務客戶，壓力測試結果也證明了這一點" [5].
The Federal Reserve is currently revising its stress testing framework to improve transparency and methodology following criticism from the banking industry [1, 2, 3, 4, 6]. The pending Basel III Endgame regulatory proposal is expected to significantly alter capital requirements and free up capital for banks [1, 3, 4, 6].
