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Bank Stocks in Focus Ahead of Stress Test Results

EQUITIES
  • This week, the Federal Reserve release the results of their stress tests on US banking institutions, due at 1630ET/2130BST on Thursday 24th June.
  • The Fed outlined the adverse economic scenarios that bank operations would be tested against in February's release: 2021 Stress Test Scenario - found here: https://www.federalreserve.gov/newsevents/pressrel...
  • The adverse scenario is designed to replicate 'a severe global recession accompanied by a period of heightened stress in commercial real estate and corporate debt markets.'
  • The scenario sees US real GDP growth fall 5.5% in Q1 2021, trickling through to real disposable income contracting by 9.9% in Q2. House prices are seen falling over 20% over two years in the adverse scenario, with commercial prices shedding near 40%.
  • The results could prove key for markets at this juncture, with analysts expecting the Fed to allow banks to resume both share buybacks and payment of dividends should they pass.
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
EM BulletHomepagemarkets-real-timeFixed Income BulletsEquitiesBulletMarketsEmerging Market NewsForeign Exchange Bullets
MNI London Bureau | +44 203-865-3809 | edward.hardy@marketnews.com
EM BulletHomepagemarkets-real-timeFixed Income BulletsEquitiesBulletMarketsEmerging Market NewsForeign Exchange Bullets

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