WASHINGTON—The 35 largest U.S. banks are poised to put more money toward dividends, share buybacks and business investments, after clearing the first stage of an annual regulatory stress test on Thursday, showing they have enough capital to withstand an extreme recession.
Although the lenders would suffer $578 billion in total losses in the Federal Reserve’s most severe scenario to date, their level of high-quality capital would be greater than the threshold that regulators demand - and above levels seen immediately leading up to the 2007-2009 crisis, the Fed said.
