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Eleven US banks face key capital lows in 2026 stress tests

Created at 2 Jul · 3:35 AM1 source↑ Market-relevant
IN SHORT

Eleven US banks are projected to reach their weakest capital points by the end of the Federal Reserve's 2026 Dodd-Frank Act stress test (DFAST). Their Common Equity Tier 1 ratios are expected to decline or plateau at their lowest levels during the hypothetical scenario.

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Key Numbers

2026year of DFAST stress test
ninequarters in severely adverse scenario

Who's Involved

BMO US
US bank facing key capital lows
RBC US
US bank facing key capital lows
TD US
US bank facing key capital lows
Federal Reserve
US central bank conducting stress tests

↳ Why This Matters

The projected capital lows for these eleven U.S. banks in the upcoming stress tests could signal potential constraints on their ability to lend or distribute capital, impacting financial sector stability and economic growth.

Key facts

  • Eleven US banks are projected to be at their weakest capital points by the end of the 2026 DFAST.
  • These banks' Common Equity Tier 1 (CET1) capital ratios are expected to decline or plateau at their nadirs.
  • BMO US, RBC US, and TD US are among the firms expected to remain at low points across leverage and SLR ratios.

Eleven U.S. banks are projected to reach their weakest capital positions by the conclusion of the Federal Reserve's 2026 Dodd-Frank Act stress test (DFAST), according to an analysis by Risk Quantum. These institutions are expected to see their Common Equity Tier 1 (CET1) capital ratios either continue to decline throughout the nine-quarter severely adverse scenario or stabilize at their lowest points by the end of the hypothetical period, indicating a slower recovery from the simulated economic downturn.

Among these firms, BMO US, RBC US, and TD US are specifically noted as being among those that will also remain at their nadirs across both leverage and supplementary leverage ratio (SLR) metrics. The analysis suggests these banks will be at their most vulnerable capital levels under the stress test conditions.

Frequently asked questions

DFAST is a set of supervisory stress tests mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act to assess whether large U.S. financial institutions have sufficient capital to absorb losses and continue operating during times of severe financial and economic distress.

CET1 (Common Equity Tier 1) ratio is a measure of a bank's core capital relative to its risk-weighted assets. Leverage ratio measures a bank's capital against its total unweighted assets. SLR (Supplementary Leverage Ratio) is a U.S. specific measure that acts as a backstop to risk-weighted capital requirements.

Being at its 'nadirs' means a bank's capital ratios are at their lowest projected points within the stress test scenario, indicating a period of maximum capital strain.

What Happens Next

01The Federal Reserve will conduct the 2026 DFAST.
02Analysis will continue on the capital positions of the eleven identified banks.

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How It Developed

Eleven US banks will reach their weakest capital points by the end of the 2026 DFAST.
These firms' projected CET1 ratios will decline or plateau at nadirs during the scenario.

Sources

T1
Eleven US banks end DFAST at key capital lowsRisk.net

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