Biggest U.S. banks clear first hurdle in Fed’s annual stress tests | Reuters

Biggest U.S. banks clear first hurdle in Fed's annual stress tests | Reuters Reuters By Pete Schroeder and David Henry | WASHINGTON/NEW YORK WASHINGTON/NEW YORK The 34 largest U.S. banks have all cleared the first stage of an annual stress test, showing they would be able to maintain enough capital in an extreme recession to meet regulatory requirements, the Federal Reserve said on Thursday.Although the banks, including household names like JPMorgan Chase & Co (JPM.N) and Bank of America Corp (BAC.N), would suffer $383 billion in loan losses in the Fed's most severe scenario, their level of high-quality capital would be substantially higher than the threshold that regulators demand, and an improvement over last year's level."This year's results show that, even during a severe recession, our large banks would remain well capitalized," said Fed Governor Jerome Powell, who leads banking regulation for the central bank. "This would allow them to lend throughout the economic cycle, and support households and businesses when times are tough."The Fed introduced the stress tests in the wake of the financial crisis to ensure the health of the banking industry, whose ability to lend is considered crucial to the health of the economy.Under the Fed's worst-case stress test scenario, the U.S The post Biggest U.S. banks clear first hurdle in Fed's annual stress tests | Reuters appeared first on Firstpost. 1