US Fed says banks can weather severe downturn comfortably

The 34 lenders with more than $100 billion in assets that the the Fed oversees would suffer a combined $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 JPM.N, Bank of America BAC.N, Wells Fargo WFC.N, Citigroup C.N, Morgan Stanley MS.N and Goldman Sachs GS.N can use their excess capital to issue dividends and buybacks to shareholders.

WASHINGTON: The largest U.S. banks would remain well capitalized in the event of a severe economic shock, the U.S. Federal Reserve said on Thursday after the lenders' annual health check, paving the way for them to issue share buybacks and dividends.

The 34 lenders with more than $100 billion in assets that the the Fed oversees would suffer a combined $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.