Financial company shares moved lower as investors weighed the results of the latest financial stress tests and awaited announcements on capital return plans.
Big U.S. banks passed their latest annual stress test, with the Federal Reserve finding they would be able to continue lending to households and businesses in a severe recession, even while suffering steeper losses than last year's tests.
The banks would collectively lose nearly $685 billion in the Fed's imaginary worst-case recession, the Fed said. That would be more than last year, but all the banks would still remain above their minimum capital requirements.
JPMorgan Chase said that the Federal Reserve underestimated the bank's potential losses during a severe hypothetical recession in the recent stress tests. The bank said the Fed's estimate seemed to have JPMorgan's "other comprehensive income" too high under a stress scenario. Therefore, the bank would have expected to incur "modestly higher" losses.
Write to Patrick Sullivan at patrick.sullivan@wsj.com
(END) Dow Jones Newswires
06-27-24 1818ET
