Unrealised losses down but not out in latest DFAST
Bank of America would emerge from Fed’s scenario with $22 billion net AOCI gain
In the latest Dodd-Frank Act stress test (DFAST), unrealised losses included in accumulated other comprehensive income (AOCI) were projected to be cut in half by the end of the nine-quarter scenario.
Inflation was projected to nosedive to 1.5% and interest rates to follow suit, causing unrealised losses across the banks to drop from $97.9 billion to $41.5 billion.
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Most previous DFAST exercises did not see turnarounds of this scale. For example, the 2022 exercise calculated a $4.5
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