Federal Reserve says 17 of the nation’s 18 largest banks could survive a severe economic meltdown.
In its annual stress test of the nation’s largest banks, the Federal Reserve estimated that these firms would lose $462 billion dollars if the economy were to enter another recession similar to the one we just had.
Despite those losses, though, the Fed says nearly all of these banks would survive.
Of the 18 banks tested by the Fed, only Ally Financial, the former finance arm of General Motors (GM), would sustain big enough losses to potentially put it out of business. All of the other banks would have enough capital to make it through.
Another surprise? Citigroup (C), which has struggled since the financial crisis and recently named a new CEO, was deemed the most prepared to weather another recession among the nation’s six largest banks. Citi was followed by Wells Fargo (WFC) and Bank of America (BAC).
JPMorgan Chase (JPM), which is generally thought to be the strongest of the nation’s big banks, came out only ahead of Goldman and Morgan Stanley. It also was projected to have the biggest losses of the 18 biggest banks … at just over $77 billion.continue reading »