US Banks Pass Severe Recession Stress Test, Avoid Credit Crunch

The United States Federal Reserve has announced that all 23 of the country's largest banks have passed its stress tests, indicating their ability to survive a severe recession. The stress test revealed relative weakness among midsize and regional banks. The Fed has hinted at the possibility of making future stress tests more challenging. The tests simulate severe economic scenarios, including a global recession causing significant declines in property prices and a spike in unemployment. The banks participating in the stress tests would collectively face losses of $541 billion in the worst-case scenario.