Stress test shows top US banks can weather major downturn comfortably WASHINGTON : The largest US banks yesterday easily cleared the Federal Reserve’s (Fed) annual health check, in a vote of confidence for the sector amid signs the US 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 US$100 billion (RM440 billion) in assets that the Fed oversees would suffer a combined US$612 billion in losses under a hypothetical severe downturn, the central bank said. But that would still leave them with roughly twice the amount of capital required under its rules. As a result, banks including JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Morgan Stanley and Goldman Sachs can use their excess capital to issue dividends and buybacks to shareholders. Those plans can be announced after the close of trading on Monday. “We view this as about as positive for the big banks as one could expect from the annual stress test,” Jaret Seiberg, an analyst with Cowen Washington Research Group, said in a research note. “Banks didn’t just perform well.