"Today's results reaffirm that US banks are strong and remain well positioned to continue playing their important role in accelerating economic growth", Rob Nicholas, president of the American Bankers Association, said in a statement.
The most severe hypothetical scenario projects $383 billion in loan losses at the 34 participating bank holding companies during the nine quarters tested.
Revising the Fed's annual stress tests is one of more than 100 recommendations the administration has suggested to lessen the burden on banks, including limiting the number of financial firms that must face the exams.
A Fed official said Thursday that the results show the industry is well-capitalized and credited the reforms with boosting lending for banks.
"This year's results show that, even during a severe recession, our large banks would remain well capitalised", governor Jerome H. Powell said.
The second set of results, which outline which banks may return capital to investors, are due next week.
Wall Street analysts and trade groups quickly cheered the results on Thursday, saying regulators should feel comfortable easing tough rules put in place since the financial crisis.
"Today's results reaffirm that U.S. banks are strong and remain well positioned to continue playing their important role in accelerating economic growth", the group said.
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The executive order is more of a directive and less a dramatic change in administrative policy. Trump kept up the pressure on Congress to approve a plan to replace the Affordable Care Act.
Rob Nichols, president and chief executive officer of the American Bankers Association, said the Fed should consider a number of recommendations recently laid out by the Treasury Department, including making the stress tests more transparent and less frequent. "From this solid foundation, the focus should now turn to what can be done to help US banks promote economic growth even further". With the Dodd-Frank results in hand, now banks have the option of revising their capital plans before CCAR is released. This part determines whether the banks would meet minimum requirements under the Fed's methodology, using materials they submitted. For individual banks, the Fed requires a level of 4.5 percent.
The latest downturn scenario includes: the US unemployment rate peaking at 10 percent in the third quarter of 2018 - up from 4.3 percent in May; a 49.7 percent decline in the Dow Jones Industrial Average; a decline in home prices of 25.7 percent and a 34 percent decline in commercial real-estate prices, both between now and December 31, 2018; an increase in 30-year mortgage rates to 4.6 percent; and an inflation rate of 1.4 percent in 2017 and 1.8 percent in 2018.
Citigroup performed the best with a tier 1 capital ratio of 9.7 per cent. Ally Financial and KeyCorp were both below seven per cent. Those banks represent about 75 percent of all USA assets. That's when the Fed will announce whether it has approved banks' requests to increase dividends or buy back shares.
That means even if a bank passed a year ago, there's no guarantee it will do so again. The 9.2 percent level shows improvement from last year's 8.4 percent.
Of those, Goldman Sachs had the biggest optimism gap compared with the Fed when it came to the worst-case scenario.
Conversely, JPMorgan's analysis appeared to be more dour, with its CET1 ratio coming in 1.3 percentage points below the Fed's.
"If the Fed bets wrong and treats one particular trading strategy as low risk and it's high risk, all the banks will have taken that low-risk bet and it will have turned out very badly", she said.
That would trigger combined losses of almost $500bn over more than two years - including $383bn from loans - but the firms have enough of a cushion to handle such a blow, the Federal Reserve said.