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Recent Editions

Risk Channel
North America
The biggest U.S. banks have passed the Federal Reserve’s annual tests of whether they can withstand a future economic and market crisis, with firms maintaining robust capital levels even after suffering hundreds of billions of dollars in losses. The results of the U.S. central bank's yearly "stress test" of large lenders' finances found they remain resilient in the face of a potential recession, a spike in unemployment, and market turmoil. “Large banks remain well capitalized and resilient to a range of severe outcomes,” said Michelle Bowman, the Fed’s vice-chair for supervision. "The stress tests have proven that most banks have more than twice the reserve capital required, so there is evidence that they could use this to spur loan growth," observed Brian Mulberry, portfolio manager at Zacks Investment Management, which holds banking stocks. "Considering that the U.S. consumer is still strong and the stress test supports their healthy positions, we could see the banks pull some of the capital back and channel it into lending."
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Risk Channel
UK/Europe
Agustín Carstens, general manager of the Bank for International Settlements, has warned that the global economy is at a "pivotal moment" as it enters a "new era of heightened uncertainty and unpredictability." This, he said, is testing public trust in institutions such as central banks. Mr Carstens, the former governor of Mexico's central bank, said increasing protectionism and trade fragmentation is "particular concerning" as they were exacerbating a decline in economic and productivity growth. He also voiced concern over evidence that the world economy is becoming less resilient to shocks. Pointing to rising debt levels, Mr Carstens said: "This trend cannot continue."
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