The Blubber

Per The Hill

The Federal Reserve has recently commented on how much big US banks are expected to lose should the economy enter a doomsday scenario. It was noted that the findings came from its annual banking sector stress test, which aimed to see how vulnerable the banking sector was.

Fed officials used hypothetical situations in the stress test and found that big US banks could ultimately lose over half a trillion, specifically $541 billion. This was if economic conditions declined.

For the real estate sector alone, it was said that commercial and residential real estate alone is expected to cost over $100 billion in losses.

“The $541 billion in total projected losses includes over $100 billion in losses from commercial real estate and residential mortgages,”

Here's how much some of the top banks were expected to lose.

• JPMorgan Chase - $72.9 billion
• Bank of America - $54 billion
• Capital One - $46 billion

The top 23 banks were estimated to lose over $424 billion in loans.

At the end of March, Elon Musk said that the state of the commercial real estate debt market was the most pressing issue.

It was previously reported that 22 banks had unrealized losses exceeding 50% of their capital at the end of Q3 2022.

See flow at unusualwhales.com/flow.

Other News:

• Elon Musk says the state of the commercial real estate debt market is "by far the most serious looming issue."
• 22 banks reported unrealized losses exceeding 50% of their capital at the end of the third quarter of 2022

Resources:

The Hill