The results of the Federal Reserve’s annual stress test are in, and the biggest banks in the U.S. passed with flying colors.

The hypothetical scenario laid out by the Fed called for banks to absorb nearly $708 billion in cumulative losses, including about $200 billion in credit card losses, $160 billion in commercial and industrial loan losses and $75 billion in losses from commercial real estate.

It assumed a severe global recession entailing unemployment peaking at 10%, commercial real estate prices plunging 39% and house prices declining 30%.

All 32 banks tested under that hypothetical scenario maintained minimum capital requirements, with capital declining 1.6 percentage points in aggregate, the smallest decline of any Fed stress test of the past seven years.

“Today’s results underscore the strength of the banking system,” stated Michelle Bowman, the Fed’s vice chair for supervision, in a press release. “As we work to increase the transparency and accountability of the stress test, public feedback will help us continue to improve and instill greater confidence in the stress test and its results.”

This year’s exercise will not impact the amount of capital big banks are required to hold, however. In February, the Fed voted to maintain the current stress capital buffer requirements until 2027, a move Bowman claimed “should further improve the transparency, effectiveness and fairness of our models and improve our accountability to the public.”

That announcement came shortly before the U.S. central bank and other regulatory bodies unveiled sweeping proposals that would revise parts of the existing Basel III banking framework and reduce the amount of capital reserves required to be held by large banks.

According to one of the proposed rules, the changes would allow big banks to hold 2.4% less capital on average. When combined with proposed stress test changes, “the decrease would be 4.8%, based on the average impact across 2024 and 2025 stress tests.”

A 90-day comment period on the rule changes, which would also adjust risk weights assigned to mortgage servicing assets, ended June 18, with the proposals receiving mixed reviews from lawmakers and industry stakeholders.