The largest U.S. banks on Thursday easily cleared the Federal Reserve’s annual health check, in a vote of confidence for the sector.
Results of the Fed’s annual “stress test” exercise showed the banks have enough capital to weather a severe economic downturn.
The results pave the way for them to issue share buybacks and pay dividends.
The average capital ratio for the 34 banks was 9.7%, the Fed said.
That compares with 10.6% last year when the Fed tested 23 lenders against a slightly easier scenario.
The test assesses whether banks would stay above the required minimum 4.5% capital ratio.
Banks that perform well typically stay well above that.
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