💨 Abstract

In 2025, all 22 major banks passed the Federal Reserve's annual stress tests, which simulated a severe economic downturn. However, this year's tests were less rigorous than in 2024, with smaller declines in economic metrics. The Fed cited "unintended volatility" in previous tests and did not assess exposure to private equity or credit. Critics note that private credit, a rapidly growing asset class, was not evaluated despite potential systemic risks.

Courtesy: WTOP Staff