Are Your Bank Stock Dividends in Danger?

The Federal Reserve announced the results of its 2020 bank stress tests on Thursday, and in some ways, the results were rather encouraging. Even under some extremely severe hypothetical scenarios -- such as unemployment peaking at 19.5% and a long U- or W-shaped recovery -- most big banks would remain well-capitalized.

However, the bad news is that under some of the recession scenarios, loan losses would be as high as $700 billion across the 33 banks subject to the tests due to elevated and prolonged unemployment, and this could cause some (but not most) of the banks to approach minimum capital levels.

Image source: Getty Images.

Continue reading

Source Fool.com