UBS and Credit Suisse Pass U.S. Stress Test

The U.S. central bank has looked into the resilience of foreign banks to external shocks. The big two Swiss banks have done well in the test.

UBS and Credit Suisse, the Swiss No. 1 and 2, have passed the latest stress test by the U.S. Federal Reserve. The U.S. holding units of the Swiss banks would survive a severly adverse scenario as used by the U.S. authority to test the banks' resilience, the Fed said in statement.

In practice, this means that the two banks would survive a severe recession that would result in significant losses. The test included a period of nine quarters, starting at the beginning of 2019 and lasting through the first quarter of 2021.

Capital Requirements

The Fed looked into the ability of banks to inject enough capital into their U.S. holdings in case of the adverse scenarios.

The test included complex domestic banks as well as five major foreign banks: Credit Suisse, UBS, Deutsche Bank, Barclays and Toronto Dominion Bank. All the banks passed the first part of the test. The Fed will publish the second, more complex part of the test on Thursday.