Big Banks Pass Fed’s Stress Test with Strong Capital Buffers

Article Summary

All 22 of the largest U.S. banks passed the Federal Reserve’s 2025 stress test, demonstrating resilience even under a hypothetical severe recession. The scenario included a 30% drop in commercial real estate prices, a 33% plunge in housing prices, and a 5.9 percentage point rise in unemployment, peaking at 10%. Despite projected losses exceeding $550 billion, banks maintained capital ratios well above regulatory minimums.

The aggregate common equity tier 1 (CET1) capital ratio fell from 13.4% to a minimum of 11.6%, then recovered to 12.7%. Notably, Charles Schwab posted the highest CET1 ratio at 32.7%, while JPMorgan Chase, Goldman Sachs, and Morgan Stanley also performed strongly. Analysts expect most banks to see a decline in their stress capital buffer (SCB), potentially freeing up capital for dividends and buybacks.

The Fed acknowledged “unintended volatility” in its models and is considering averaging stress test results over two years to smooth out fluctuations. A July 22 conference will address potential revisions to capital requirements and the stress testing framework.

Full article from Banking Dive

Local Business Types for Broadcasters to Consider Contacting

• Community Banks and Credit Unions – These institutions can use the spotlight on big banks to emphasize their local roots, personalized service, and financial stability.

• Financial Advisors and Retirement Planners – With economic uncertainty still top of mind, these professionals can benefit from campaigns focused on long-term planning and portfolio resilience.

• Tax Prep and Budgeting Services – As consumers navigate inflation and financial stress, local firms offering clarity and support can align with the broader conversation around financial security.

Three Creative Campaign Ideas for Broadcasters to Consider

• Radio Station Commercial Idea: “Banking Confidence Starts Local” – A series featuring local financial experts discussing how community institutions support residents through economic ups and downs.

• TV Station Commercial Idea: “Strong Banks, Strong Futures” – A campaign spotlighting how financial planning and local banking options help families build stability, with real-life testimonials.

• Digital Advertising Campaign Idea: “Your Money, Your Move” – Launch a budgeting challenge with tips from local advisors, interactive tools, and spotlights on businesses offering financial wellness services.