U.S. Markets open in 5 hrs 52 mins

Philadelphia's largest deposit takers pass latest round of Fed's stress tests

Jeff Blumenthal
Philadelphia's largest deposit takers pass latest round of Fed's stress tests

The nation’s largest 18 banks, including most of Philadelphia’s biggest deposit takers, have passed the first round of annual stress testing, proving to the Federal Reserve that they had enough capital to withstand a severe and prolonged economic downturn. The Fed set up a “severely adverse” scenario to test the banks. The hypothetical scenario projects $410 billion in total losses for the 18 participating banks amid a global recession with the U.S. unemployment rate rising by more than 6 percentage points to 10 percent, accompanied by an 8% drop in real gross domestic product, a large decline in real estate prices and elevated stress in corporate loan markets.