Fed Releases Bank Stress-Test Results, Leaves Capital Requirements Unchanged

The Federal Reserve conducts stress tests of large banks under the Dodd-Frank Act to assess their ability to absorb losses and continue lending during a severe recession. The results are typically used to set each bank’s stress capital buffer, affecting dividend and share-buyback policies.

The Fed released its 2026 results on June 24, with all 32 banks passing. The hypothetical scenario generated more than $708 billion in losses, but the aggregate common equity Tier 1 capital ratio fell just 1.6 percentage points, the smallest decline since 2020. Because the stress-test models are undergoing public review, the results will not be used to adjust capital requirements, and the current standards will remain in place through 2027.