The Board of Governors of the Federal Reserve System reported that each of the 32 U.S. banks that participated in its annual stress test has sufficient capital to absorb nearly $708 billion in losses and continue lending to households and businesses under stressful conditions. Under the “severely adverse” scenario, which included a 10% peak in U.S. unemployment, a 58% drop in equity prices, and a 39% decline in commercial real estate prices, the average common equity tier 1 capital ratio of these banks would bottom out at 11.2%, well above the minimum requirement of 4.5%.