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Deutsche Bank USA projected smaller capital decline than Fed in stress tests

Created at 14 Jul · 3:36 AM1 source↑ Market-relevant
IN SHORT

Deutsche Bank USA projected a 4.8 percentage point decline in its Common Equity Tier 1 ratio, significantly less than the 8.2 percentage point drop projected by the Federal Reserve in the 2026 Dodd-Frank stress tests.

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Key Numbers

9banks projecting smaller CET1 falls
4.8ppprojected CET1 ratio decline for DB USA
22.6%DB USA's starting CET1 ratio
17.8%DB USA's projected minimum CET1 ratio
8.2ppFed's projected CET1 ratio decline for DB USA

Who's Involved

Deutsche Bank USA
projected smaller capital decline than Fed in stress tests
Federal Reserve
projected larger capital decline for DB USA in stress tests

↳ Why This Matters

The discrepancy in projected capital declines between banks and the Federal Reserve in stress tests could indicate differing assumptions about economic conditions or bank-specific resilience, potentially influencing regulatory oversight and market confidence.

Key facts

  • Nine US banks projected smaller Common Equity Tier 1 (CET1) ratio declines than the Federal Reserve in the 2026 Dodd-Frank stress tests (DFAST).
  • Deutsche Bank USA projected the largest gap between its own projection and the Fed's.
  • Deutsche Bank USA projected its CET1 ratio would fall 4.8 percentage points under the severely adverse scenario.
  • The Federal Reserve projected an 8.2 percentage point decline for Deutsche Bank USA's CET1 ratio.

Nine US banks projected smaller declines in their Common Equity Tier 1 (CET1) ratios than the Federal Reserve in the 2026 Dodd-Frank stress tests (DFAST), according to Risk Quantum analysis. Deutsche Bank USA recorded the largest gap between its own projection and the Fed's. The bank projected its CET1 ratio would fall 4.8 percentage points from 22.6% to a minimum of 17.8% under the severely adverse scenario. In contrast, the Fed projected an 8.2 percentage point decline for Deutsche Bank USA.

Frequently asked questions

DFAST are annual tests conducted by the Federal Reserve to assess whether large US banks have sufficient capital to absorb losses and continue operating during periods of severe financial and economic stress.

The CET1 ratio is a measure of a bank's core equity capital relative to its risk-weighted assets, serving as a key indicator of its financial strength and ability to withstand losses.

Differences can arise from varying assumptions about macroeconomic factors, the specific methodologies used to model losses, and the unique risk profiles of each institution.

What Happens Next

01Further analysis of the 2026 DFAST projections for other banks is expected.

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How It Developed

Nine US banks projected smaller CET1 ratio declines than the Fed in 2026 DFAST.
Deutsche Bank USA projected the largest gap, with an 8.2pp decline versus its own projection of 4.8pp.

Sources

T1
DB USA undershoots Fed capital decline by 3.4pp in DFAST 2026Risk.net

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