Big banks make it through stress tests,

U.S. banks made it through the latest round of stress testing relatively unscathed, setting investors up for news next week of payouts from the industry's biggest names.

Testings results released Thursday by the Federal Reserve show that the 34 institutions under scrutiny have enough capital to make it through the two scenarios regulators posed — one akin to the financial crisis and another entailing a shallower downturn.

The tests marked the third straight year the banks all met the Fed's standards for health and could boost arguments from Republican legislators and President Donald Trump for loosening regulations.

"This year's results show that, even during a severe recession, our large banks would
remain well capitalized," Fed Governor Jerome H. Powell said in a statement."

In the most severe scenario, bank losses are projected to be $493 billion.

Thursday's results are the first in a two-step process, with the second and more important happening Wednesday when the Fed will approve or disapprove the banks plans to return capital to shareholders. Indications are that some of the largest banks want to return more than 100 percent of profits.

Source: Bloomberg 

Junior Trader Stefan Panteleev

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