(CNN Money) — Wall Street banks are strong enough to withstand the next severe economic downturn.
The Federal Reserve said Thursday that 35 major financial institutions, including Bank of America, JPMorgan Chase and Citigroup, would be able to lend under even the grimmest of economic conditions.
The results reflected the first round of the Fed’s annual stress test. The Fed will announce next week whether banks are cleared to raise their stock dividends.
While today’s real-world economy is solid, with an unemployment rate of 3.8%, the Fed’s yearly checkup tests under a much harsher reality.
In this year’s exam, banks were tested against an economy with 10% unemployment, a plummet in housing prices and a severe recession in Europe and elsewhere.