Bank of America Corp. has the capital to keep lending in a severe economic downturn, the Federal Reserve calculated Thursday in the first stage of its annual stress tests. At the low point of a hypothetical recession, Bank of America’s common equity Tier 1 ratio, which is a measure of high-quality capital as a share of risk-weighted assets, was 8.1%, exceeding the 4.5% level the Fed views as a minimum, the central bank estimated....
Amid its stress tests , the US Federal Reserve has announced that Bank of America has enough capital to continue lending during times of severe economic stress . The bank 's common equity Tier 1 ratio exceeded the minimum 5 % by reaching 7 % while its Tier 1 leverage ratio reached 6.4 % , 2.4 % higher than the minimum 5 . If Bank of America continue to make steady progress , the Federal Reserve may change its plans to reward shareholders with potential share buybacks and loans .