Banks would lose $541 billion in ‘hard landing’ contingency… Most investors believe there will be no recession in 2023… Retail has been wonderful exit liquidity for big players.

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Banks would lose $541 billion in ‘hard landing’ contingency: Fed

The Federal Reserve said Thursday that banks are well capitalized enough to endure a severe recession but stand to lose $541 billion if the economy heads south.

The findings came from the Fed’s annual stress test of the banking sector, which is based on major hypothetical declines in economic conditions, including a 40-percent drop in real estate prices and widespread office vacancies.

“The $541 billion in total projected losses includes over $100 billion in losses from commercial real estate and residential mortgages,” Fed officials found, noting the loss would represent a 2.3-percentage point decline in total capital.

Bank of America would lose $54 billion, Capital One would lose $46 billion, and JPMorgan Chase would lose $72.9 billion. Altogether, the top 23 banks would lose more than $424 billion in loans, the Fed said.

 

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