Let’s all give a polite round of applause to America’s largest banks. They just survived another game of Federal Reserve “financial apocalypse pretend,” emerging with bruises no worse than a mild accounting hiccup and a subtle wink at Jamie Dimon’s tan. The June 2025 stress test results are in, and guess what? All 22 mega-banks passed with flying dollar signs, just in time to help the Trump administration justify a looser regulatory leash. Because if there's one thing this economy needs right now, it's more freedom for trillion-dollar institutions to self-regulate.
A+ for Apocalypse Preparedness (Sponsored by the Lobbyists’ Union of America)
This year's stress test hurled everything short of alien invasion at the banks: an 8% GDP contraction, 10% unemployment, 33% crash in home prices, and a glorious 50% wipeout in the stock market. The outcome? The banks—JPMorgan, Bank of America, Citi, Wells Fargo, Goldman Sachs, Morgan Stanley, and their $100 billion-and-up club buddies—shrugged and said, “We good.”
Despite simulating a recession that sounds like it was curated by a committee of Doomsday preppers, the banks’ Common Equity Tier 1 (CET1) capital ratio still cruised comfortably at 11.6%, more than double the required 4.5%. If you're unfamiliar with CET1, think of it as the financial equivalent of body fat percentage. These banks aren’t just in shape—they’re ready for the Olympics of economic disaster.
Of course, the test still estimates a casual $550 billion in collective losses—including $148 billion in credit card chaos and $52 billion in commercial real estate implosion—but it’s fine. Because Jamie Dimon’s bank account is doing push-ups on a pile of Treasury bonds.
Michelle Bowman: The Deregulator-in-Chief
Enter Michelle Bowman, the Fed’s vice chair for supervision—and, by sheer coincidence, a Trump appointee who seems to think regulation is best left in a museum. Bowman was quick to point out that these results are yet another resounding endorsement for the “let the big banks do what they want” doctrine. In her own words, “Large banks remain well capitalized and resilient to a range of severe outcomes.” Translation: “Let’s cut their capital cushions now before another crisis comes along to make us look stupid.”
Her speech wasn’t just a victory lap—it was a formal RSVP to the deregulation party. On the chopping block? The Enhanced Supplementary Leverage Ratio (eSLR), a little-known but important metric that banks hate because it punishes them for holding low-risk government debt. That’s right—banks are mad that regulators make them account for Treasuries. Because how dare we make them responsible for assets that are supposed to be the safest?
Don’t Worry, They’ll Still Have Enough for Dividends and Buybacks
The real kicker? This isn’t about protecting depositors or building resilience. It’s about clearing the runway for bigger dividend fireworks and a buyback bonanza. The Fed, ever the courteous host, asked banks to hold off on announcing shareholder rewards until next week—just enough time for PR teams to polish their press releases with phrases like “shareholder value creation” and “responsible deployment of excess capital.”
Wells Fargo analyst Mike Mayo—whose name alone inspires confidence—called the test results a “green light” for banks to throw money at deals, loans, and repurchasing their own stock. Because what could go wrong when the same institutions that once brought the global economy to its knees start handing out billions like candy?
The Real Test: Can We Learn Nothing From 2008 Twice in One Generation?
The stress tests were born out of the 2008 financial crisis—a modest little meltdown you might recall as the one that took your home, your pension, and maybe your will to live. Back then, lawmakers realized that letting banks regulate themselves was about as effective as giving toddlers gasoline and matches.
So they made stress testing an annual tradition. A fire drill. A simulation of doom designed to keep banks honest—or at least nervous enough to hold a capital cushion instead of YOLO-ing it all into derivatives.
But now? Now it’s become a game. And not the fun kind—more like Monopoly with real money and no rules. The regulators tweak the rules every year. The banks learn the models like it’s the SATs. And everyone leaves satisfied that they did just enough to survive hypothetical hell.
Except this time, the outcome isn’t caution—it’s deregulation.
Trump’s Deregulatory Dream Team Returns
In case you missed it, the Trump administration is back and more committed than ever to undoing the 2008 reforms that kept Wall Street’s creative accounting impulses in check. They’ve dusted off every dusty libertarian think-tank whitepaper they could find, determined to convince the American people that what JPMorgan needs right now isn’t scrutiny—it’s freedom.
Loosen capital requirements? Why not. Reduce the global systemically important bank surcharge? Sure. Raise asset thresholds so fewer banks have to comply with strict rules? You bet.
What’s next? Letting Goldman Sachs underwrite the next stress test themselves? Don’t tempt them.
Jamie Dimon: Wall Street’s Unofficial Fed Chair
Let’s talk about Jamie Dimon for a moment. CEO of JPMorgan Chase. Frequent visitor to the Senate. Smug owner of the best stress test results among the big boys. Dimon doesn’t just run a bank—he moonlights as a shadow economic adviser with a private jet and a Bluetooth earpiece.
He’s already been knocking on the administration’s door asking for broader changes—more M&A flexibility, looser constraints on capital, and fewer annoying regulations to explain to shareholders.
And with Bowman and the rest of the regulatory apparatus basically waving pom-poms in his direction, he might just get everything he wants. He’s even got analysts like RBC’s Gerard Cassidy predicting “higher bank profitability and increased merger and acquisition activity” as a result of these results.
Translation: You thought “too big to fail” was bad before? Get ready for “too merged to monitor.”
Modeling a Crisis: The Hypothetical Shell Game
The stress tests themselves are also due for an update. According to the Fed, they're now soliciting public feedback on how they build the models that simulate Armageddon-lite.
Oh good—let's crowdsource financial risk modeling now. Maybe next year we can let Reddit vote on whether banks pass or fail, with a bonus multiplier for each meme stock on their balance sheets.
The Fed admits that banks showed smaller capital declines this year due to “volatility in the models” and “milder deterioration in the economy.” That's the regulatory equivalent of your teacher saying you got an A because the test was easier than usual, not because you studied harder.
And we’re using that as the foundation for gutting capital requirements?
Commercial Real Estate? What Commercial Real Estate?
One last eye-twitch-inducing detail: the scenario included $52 billion in projected commercial real estate (CRE) losses. That might seem like a lot—until you realize we’re currently living through a CRE collapse where entire downtowns are filled with ghost skyscrapers and office landlords are trading buildings for food stamps.
CRE isn't a risk on the horizon. It's here. Now. Banks are already under pressure, particularly the regional ones, and it’s not like the Wall Street titans are totally insulated. But sure, let’s pretend a $52 billion paper loss adequately reflects the long-term implications of people refusing to commute ever again.
So What Did We Learn? (Spoiler: Nothing)
Here’s the short version:
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The banks passed a test designed to be hard, but maybe not that hard.
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The Fed thinks this justifies loosening capital rules, not tightening them.
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The Trump administration is thrilled and already warming up the deregulation steamroller.
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The banks are preparing to shower shareholders with money instead of fortifying themselves against real-world, slow-burning crises like CRE or shadow banking risks.
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And Jamie Dimon is probably writing his next op-ed on how regulation is killing capitalism—while making $40 million a year.
Congratulations, America. You’ve Been Stress-Tested.
In the end, we’re all part of the stress test. Because the next time a real financial crisis hits—and it will—we’ll be the ones footing the bill while banks get bailed out, shareholders walk away richer, and regulators explain, again, how they never saw it coming.
But at least we’ll have the memories. The memories of that one magical summer in 2025 when Wall Street aced its imaginary exam, the Fed applauded, and Washington opened the deregulation floodgates with a smile.
After all, if history teaches us anything, it’s that letting banks regulate themselves never backfires.
Right?