Unofficial Bank Stress Illustration

Bank Stress Test Parameter Impact & Scenario Modeler

Projected Min CET1 Ratio
7.2%
Statutory minimum: 4.5% + SCB buffer
Capital Buffer Shortfall
0.3%
Threshold hurdle: 7.50% CET1
Modeled Asset-Based Dollar Proxy
$8.0B
Illustrative total-assets dollar proxy
Illustrative Lending-Change Index
-14.5%
Authored shock-weighted index
Illustrative Threshold Comparison
Conditional Modeled Gap
Illustration only; no legal finding
Illustrative CET1 Path and Reference Lines
Fixed nine-point curve under the selected shock assumptions
Projected CET1
Assumed Threshold (7.5%)
Statutory Min (4.5%)
Quarterly Capital & Credit Provision Trajectory Regional Financial Corp
Quarter Unemployment CRE Price Index CET1 Ratio Capital Buffer State Dollar Proxy Lending Index
Illustrative model scope: The 7.5% comparison line is a page assumption. Actual CET1 requirements vary by institution and can include a stress capital buffer and a GSIB surcharge. The Federal Reserve stated that its 2026 stress-test results did not change current capital requirements. This tool establishes no legal restriction or supervisory action; see the explanations and official references below.

Read the stress scenario as an illustration, not a supervisory decision

What do the displayed capital figures establish?

This tool translates four shock inputs into an illustrative capital-ratio decline. Its fixed threshold and status labels are simulation choices. They do not establish a real institution’s capital requirement, insolvency, distribution restrictions or lending capacity.

The existing tool uses unofficial formulas and legal-sounding labels. Treat every verdict as a modeled threshold comparison, not a real regulatory finding. The dollar figure uses total assets rather than risk-weighted assets.

Try a worked example

At the default inputs, the capital-decline formula adds 1.32 percentage points from unemployment, 1.00 from commercial property, 0.40 from spreads and 0.48 from the market index: 3.20 points altogether. Subtracting this from 10.4% gives 7.2%. Compared with the tool’s assumed 7.5% threshold, that is a 0.3-point gap. The displayed $8.0 billion is 3.2% of the entered $250 billion total assets; it is not an independently estimated portfolio loss.

Why the dollar figure is not a regulatory capital calculation

CET1 requirements are stated against risk-weighted assets. This tool instead multiplies its percentage-point decline by total balance-sheet assets. With no risk-weighted-asset input, portfolio exposures or revenue model, the resulting dollar amount cannot be treated as a measured CET1 loss or a supervisory stress-test estimate. Federal Reserve: June 2026 large-bank capital requirements

A bank-specific requirement replaces the universal threshold

The Federal Reserve’s June 2026 document describes a 4.5% minimum CET1 ratio, a stress capital buffer of at least 2.5% and, where applicable, a GSIB surcharge. Its table lists different total requirements for different firms. The page’s 7.5% is an illustrative assumption, not a universal requirement. Federal Reserve: June 2026 large-bank capital requirements

The trajectory and lending change are assumptions

Nine displayed points use a fixed curve with its trough at Q5 and subsequent partial recovery. The lending-change formula is a separate weighted sum of the same shocks. Neither path is inferred from a bank’s balance sheet or fitted to official supervisory models. A simulated shortfall does not itself prove a legal consequence. Federal Reserve: June 2026 large-bank capital requirements

Keep the source date with the result

The Fed’s June 24, 2026 release states that that year’s test results did not affect large-bank capital requirements. Consult the institution-specific official requirement and applicable rules rather than treating this simulation as a current compliance assessment. Federal Reserve: June 24, 2026 stress-test release

Sources and further reading
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