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