WASHINGTON, June 23 (Reuters) – The largest U.S. banks on Thursday easily cleared the Federal Reserve’s annual health check, in a vote of confidence for the sector amid signs the U.S. economy could tip into a recession in the months ahead.
The results of the Fed’s annual “stress test” exercise showed the banks have enough capital to to weather a severe economic downturn and paves the way for them to issue share buybacks and pay dividends.
The 34 lenders with more than $100 billion in assets that the Fed oversees would suffer a combined $612 billion in losses under a hypothetical severe downturn, the central bank said.
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But that would still leave them with roughly twice the amount of capital required under its rules.
As a result, banks including JPMorgan Chase (JPM.N), Bank of America (BAC.N), Wells Fargo (WFC.N), Citigroup (C.N), Morgan Stanley (MS.N) and Goldman Sachs (GS.N)…