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Recent Editions
Risk Channel
North America
The Federal Reserve said on Wednesday that the 32 largest U.S. banks remain well capitalized and are capable of withstanding a severe economic downturn while continuing to lend, after its annual stress tests showed the sector could absorb more than $700bn in hypothetical losses and still remain above minimum capital requirements. Under the test scenario, banks faced a global recession featuring 10% unemployment, a one-third decline in real estate prices, and significant financial market turmoil. The banks' aggregate common equity tier one capital ratio fell from 12.8% to 11.2% during the simulated downturn, a decline of 1.6 percentage points, but remained comfortably above regulatory minimums. The hypothetical losses included roughly $200bn from credit cards, $160bn from commercial and industrial loans, and $75bn from commercial real estate, although stronger net interest income helped offset some of the impact.
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Risk Channel
UK/Europe
French oil company TotalEnergies must account for its customers’ greenhouse gas emissions, a Paris court has found. The ruling is a partial victory for climate change NGOs seeking to apply France's 2017 corporate duty of vigilance law to climate change. However, the court stopped short of ordering specific measures such as limiting overseas exploration and production or setting binding emissions reduction targets. The court said: “Climate-related risks and impacts to which the company may contribute through its activities fall within the scope of the law on the duty of vigilance for parent companies and ordering companies.” The city of Paris said the ruling was “a landmark decision in the history of French climate law.” The city's deputy mayor, Alice Timsit, said: “For the first time, a judge recognises that climate risks do indeed fall under the duty of vigilance owed by large corporations, and no fossil-fuel multinational can evade this responsibility.”
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