February 10, 2022

Federal Reserve Board releases hypothetical scenarios for its 2022 bank stress tests

For release at 4:00 p.m. EST

The Federal Reserve Board on Thursday released the hypothetical scenarios for its annual bank stress tests, which help ensure that large banks are able to lend to households and businesses even in a severe recession. This year, 34 large banks will be tested against a severe global recession with heightened stress in commercial real estate and corporate debt markets.

The Board's stress tests evaluate the resilience of large banks by estimating losses, net revenue, and capital levels—which provide a cushion against losses—under hypothetical recession scenarios that extend more than two years into the future. The scenarios are not forecasts.

In the 2022 stress test scenario, the U.S. unemployment rate rises 5 3/4 percentage points to a peak of 10 percent over two years. The large increase in the unemployment rate is accompanied by a 40 percent decline in commercial real estate prices, widening corporate bond spreads, and a collapse in asset prices, including increased market volatility.

In addition to the hypothetical scenario, banks with large trading operations will be tested against a global market shock component that primarily stresses their trading positions. Moreover, banks with substantial trading or custodial operations will be tested against the default of their largest counterparty.

The table below shows the components of the test that apply to each bank, based on data as of September 30, 2021.

Bank Subject to global market shock Subject to counterparty default
Ally Financial Inc.    
American Express Company    
Bank of America Corporation X X
The Bank of New York Mellon Corporation   X
Barclays US LLC X X
BMO Financial Corp.    
BNP Paribas USA, Inc.    
Capital One Financial Corporation    
The Charles Schwab Corporation    
Citigroup Inc. X X
Citizens Financial Group, Inc.    
Credit Suisse Holdings (USA), Inc. X X
DB USA Corporation X X
Discover Financial Services    
Fifth Third Bancorp    
The Goldman Sachs Group, Inc. X X
HSBC North America Holdings Inc. X X
Huntington Bancshares Incorporated    
JPMorgan Chase & Co. X X
M&T Bank Corporation    
Morgan Stanley X X
MUFG Americas Holdings Corporation    
Northern Trust Corporation    
The PNC Financial Services Group, Inc.    
RBC US Group Holdings LLC    
Regions Financial Corporation    
Santander Holdings USA, Inc.    
State Street Corporation   X
TD Group US Holdings LLC    
Truist Financial Corporation    
UBS Americas Holding LLC    
U.S. Bancorp    
Wells Fargo & Company X X

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    2022 Stress Test Scenarios*

    *This report was revised on February 11, 2022, to reflect the deletion of an imprecise comparison of the paths of gross domestic product for the current and 2021 severely adverse scenarios.

Last Update: February 11, 2022