Banks pass 2020 Dodd-Frank Act Stress Test

Central Banks too big to fail

The Federal Reserve reported on June 25 that all of the 33 banks included in the 2020 Dodd-Frank Act Stress Test 2020 (DFAST) met the minimum requirement to receive a passing grade. The annual Comprehensive Capital Analysis and Review was created following the Great Financial Crisis (GFC) of the 2008-2009 recession.

It aims to evaluate how well banking and financial firms can withstand future recessions. Namely, the regulatory body checks whether banks will need another financial bailout as they did during the last fiscal crisis.

This year's DFAST review evaluated the adverse effect of the coronavirus. Consequently, the pandemic created a more negative review for all banks.

READ MORE: FHFA House Price Index Up 0.2% in April.

The review explains that the 33 banks "are suffici...

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