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Friday, March 8, 2013

Large Banks Could Withstand Severe Downturn

The 18 largest U.S. banks have continued to improve their ability to withstand a severe economic downturn and they’re in a much stronger capital position than before the financial crisis, according to the results of Dodd-Frank Act-mandated stress tests the Federal Reserve recently released.

“Significant increases in both the quality and quantity of bank capital during the past four years help ensure that banks can continue to lend to consumers and businesses, even in times of economic difficulty,” Fed Governor Daniel Tarullo said.

ABA President and CEO Frank Keating said the association is pleased that an overwhelming majority of institutions once again passed the stress-tests “with flying colors.”

“These results, achieved in the face of extreme assumptions and highly pessimistic scenarios, are further proof that the banking industry has rapidly regained its health and is strong enough to withstand even the most challenging economic circumstances,” he said.

Read the stress-test methodology and results.
Read Keating’s statement.

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