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US Fed building

Banks ace stress tests - but next one might be harder to pass

As the prospects for the US economy darken, the stress test results published on June 23 show systemically important banks are able to swallow substantial losses if a recession materialises.

Sam Woods

UK financial firms face huge climate-related losses

Climate change could inflict huge credit losses on financial firms according to the Bank of England’s latest stress tests, although these would still be manageable for the industry.

Fed stress test focuses on plunging real estate and bond prices

Severe falls in the prices of commercial real estate and corporate bonds are all part of this year’s stress tests being conducted by the US Federal Reserve to assess the resilience of the 34 biggest banks. 

EBA

EU banks withstand severe stress tests

Very severe economic and market conditions would see a capital depletion of €265bn for EU banks, but their common equity tier 1 (CET1) capital would remain above 10%, according to the European Banking Authority’s (EBA) latest stress tests, published on July 30.

US banks show their mettle during stress tests

The 23 largest banks in the US passed the latest stress tests with flying colours and could stomach nearly $500bn in losses without breaching regulatory capital levels suggesting they have weathered the Covid-19 pandemic well.

Blazing sun

ACPR finds French bank exposure to climate change to be moderate

French financial institutions will only be moderately exposed to climate change by 2050 said the Autorité de contrôle prudentiel et de résolution (ACPR), the Bank of France’s prudential regulation unit, in what it billed as the world’s first pilot climate stress test.

Alex Frankl

Will climate stress tests boost financial services resilience?

As governments and regulators ‘race to the top’ with steeper climate targets and stronger policy actions, questions remain about the resilience of the financial sector to climate change and whether it is doing enough to support the transition to a low-carbon economy. The upcoming climate stress tests may provide some, if not all, of the answers. 

Stress testing for climate change could influence bank capital levels

Banks and insurers across the world are likely to face climate-related stress tests in the next two to three years as the issue rises up the regulatory agenda with implications for capital levels, Fitch Ratings said in a note on March 15. 

Quarles says Covid complicates Fed’s stress test risk modeling

Government emergency programmes to help borrowers through the Covid-19 pandemic induced economic shock, though essential to the recovery, have nonetheless complicated stress test risk modelling, said a US Federal Reserve Board official.

Fed announces additional round of bank stress tests in response to Covid-19

The continued uncertainty around the Covid-19 pandemic has prompted the US Federal Reserve Board to announce another round of bank stress tests to see how large banks stand up against two scenarios featuring severe recessions.