Bank of America not stressed

Bank Of America Building

Bank of America has said its mid-cycle stress test showed that the bank had enough capital to withstand a severe economic downturn.

Reuters reports that the second-largest U.S. bank estimated its Tier 1 common capital ratio would hit a low of 8.4% under the hypothetical 'severely adverse scenario'.

'The estimated lowest stress ratios for Tier 1 capital, total capital and Tier 1 leverage were 9.7 percent, 12.8% and 6.3%', BofA said in the mid-cycle stress test results released on Monday.

These ratios would exceed the minimum comparable regulatory requirements in the stress scenario, which is characterized by real GDP falling 4% over six quarters and the unemployment rate rising to 11.7%.

The bank projected $26.1bn in cumulative pre-tax loss over the specified nine-quarter horizon under the hypothetical stress scenario.

Hit the link below to access the complete Reuters article:

Stress test shows Bank of America adequately capitalised

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