CHARLOTTE, N.C. - Charlotte’s two largest banks passed the latest round of the Federal Reserve’s stress testing.
Bank of America Corp. and Wells Fargo & Co. were two of 18 banks that participated in this year’s Dodd-Frank Act Stress Test, representing about 70% of all bank assets in the United States. Smaller and less complex banks were not tested in this round.
The Fed set up a “severely adverse” scenario to test the banks. That scenario included a global recession with the U.S. unemployment rate jumping to 10%. Real gross domestic product dropped by about 8%. A decline in housing prices was another factor. This year’s scenario involved a more severe recession than last year’s DFAST.
Under this type of duress, the 18 banks are projected to face $410 billion in total losses, according to the Fed’s data.
Read more here about how BofA and Wells Fargo fared.
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