Big Banks Sail Through Stress Test in Harbinger for Payouts
- Fed says all 31 banks can weather hypothetical recession
- Results pave the way for higher dividends, more buybacks
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The biggest US banks passed the Federal Reserve’s annual stress test, paving the way for higher shareholder payouts as the industry awaits a watered-down version of a separate proposal for stricter capital rules.
Each firm stayed above its minimum capital requirements during a hypothetical recession, the Fed said in a statement Wednesday. Altogether, the group would take nearly $685 billion in losses — driving a larger drop in capital than in last year’s scenario but “within the range of recent stress tests,” the regulator said.