That means most major lenders have enough reserve capital to weather a serious economic reversal, according to a Reuters report. In the Fed’s latest stress test, only Zions Bancorp couldn’t stay above the Fed’s 5% top-tier capital requirement.
The tests were mandated to show how banks would perform were there a financial meltdown similar to the 2007-2009 crisis, Reuters reported. Banks had to demonstrate that they could survive if the stock market halved, and the eight largest lenders had to take into consideration the impact should their largest trading counterparties default.
Several banks took issue with the Fed’s scores despite passing the stress test, Reuters reported. Both Bank of America and Wells Fargo said they performed better in their own internal tests than they did when the Fed was keeping score.
Altogether, the 30 banks tested account for about 80% of total banking assets in the country, according to Reuters.
If the economy implodes again tomorrow, most big banks will be able to weather the storm. That’s according to the Federal Reserve, which said that 29 out of 30 major banks passed its annual stress test.