Fed sees 'strong capital levels' at banks after stress tests, greenlights share buybacks

The central bank on Friday released the results of its second bank "stress test" for 2020, the first time it has put banks through their paces twice in one year since it began the annual health checks following the decade-ago financial crisis. The Fed had previously barred banks from buying back stock to help them build capital reserves during the coronavirus pandemic.

WASHINGTON: The largest U.S. banks have enough capital to withstand over $600 billion in losses from a short, sharp economic slump, as well as a moderate longer-lasting downturn, and will be permitted to pay out dividends and buy back stock on a limited basis, the U.S. Federal Reserve said.

The central bank on Friday released the results of its second bank "stress test" for 2020, the first time it has put banks through their paces twice in one year since it began the annual health checks following the decade-ago financial crisis. The Fed had previously barred banks from buying back stock to help them build capital reserves during the coronavirus pandemic.