Fed’s Covid stress tests strain top banks’ leverage ratios
Citi, Goldman, JP Morgan, Morgan Stanley all had projected post-stress SLRs below 5%
The Federal Reserve said the largest US banks have enough capital to withstand a prolonged Covid-induced recession following a second round of stress tests. But five lenders were projected to eat into their leverage capital buffers under the central bank’s severely adverse scenario.
Thirty-three banks participated in the exercise, which followed the Fed’s regular stress test cycle and a special coronavirus sensitivity analysis in June. Firms were assessed using a severely adverse scenario and
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