NEW YORK (AP) — All 32 of the nation’s biggest banks passed the Federal Reserve’s annual “stress test” of the financial system, the central bank said Wednesday, a sign that the banking system would remain healthy even if a major economic contraction occurred.
The annual stress test measures whether a bank’s capital, a financial cushion it uses to absorb losses, would remain at healthy levels even after hundreds of billions of dollars in projected losses. The tests are required under the Dodd-Frank Act, the law passed after the 2008 financial crisis that nearly brought down the global financial system.
