NEW YORK (AP) — The Federal Reserve said all major banks passed this year’s stress tests, showing they can withstand a hypothetical severe economic downturn. The tests, announced Friday, were less rigorous than in previous years, with milder assumptions about unemployment, real estate, and stock market declines. The Fed says the changes aim to reduce unintended volatility in results. However, the tests excluded risks like exposure to private credit, a growing $2 trillion market that has been repeatedly flagged by economists and financial market observers as potentially destabilizing. Passing the tests allows banks to issue dividends and buy back stock.
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