Chart of the Month: U.S. Banks

...All Pass First Round: Fitch Ratings believes the results of the first round of the 2017 bank regulatory stress test demonstrate the continued resiliency of the large U.S. banks. Of the 34 participating large banks, all exceeded regulatory capital minimums under the severely adverse scenario. Scenarios More Severe: For this year's Dodd-Frank Stress Test (DFAST), the severely adverse scenario included assumptions that unemployment peaks at 10%, house prices fall by 25%, and commercial real estate prices decline by 35%. Despite a slightly more severe downturn this year, estimated loan losses continued to improve with notable improvement in HELOCs given continuing improvement in the quality of the portfolios. Model Changes Phased-In: There were also previously disclosed changes to the modeling of operational risk events and commercial real estate loan losses that impacted results for some. The Fed also refined its PPNR model with material impacts on the PPNR projections for some banks, including...

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