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Federal Reserve prepares second stress test for large U.S. banks

Credit: REUTERS/Kevin Lamarque

The U.S. Federal Reserve laid out on Thursday two severe hypothetical recessions it will use to test whether banks can continue to weather an economic downturn from the coronavirus pandemic.

WASHINGTON, Sept 17 (Reuters) - The U.S. Federal Reserve laid out on Thursday two severe hypothetical recessions it will use to test whether banks can continue to weather an economic downturn from the coronavirus pandemic.

The central bank said it will release the results of the new test by the end of 2020. And by the end of September, it will announce whether it will continue banning bank stock buybacks and curbing dividend payments into the fourth quarter.

(Reporting by Pete Schroeder; Editing by Sandra Maler)

((Pete.Schroeder@thomsonreuters.com; 202-310-5485;))

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