US banks’ stress-test projections stray further from Fed’s in 2023
Average gap between Fed- and bank-estimated depletions more than double from previous two DFASTs
The largest US banks did a worse job of estimating their post-stress capital ratios in the Federal Reserve’s latest Dodd-Frank Act stress test (DFAST) compared with the previous two years, Risk Quantum research has found.
On average, the projected stressed Common Equity Tier 1 (CET1) capital ratios of the country’s eight systemic banks, plus Northern Trust, diverged from the Fed’s estimates by 70 basis points – a significant setback on the last two years, when they misjudged the regulator’s
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