Federal Reserve says US banks can weather severe downturn comfortably

Fed said the 34 lenders it oversees would suffer combined losses of $612 bn under a severe downturn

The largest U.S. banks on Thursday easily cleared the Federal Reserve's annual health check, in a vote of confidence for the sector amid signs the U.S. economy could tip into a recession in the months ahead.

The results of the Fed's annual "stress test" exercise showed the banks have enough capital to weather a severe economic downturn and paves the way for them to issue share buybacks and pay dividends.

The 34 lenders with more than $100 billion in assets that the Fed oversees would suffer a combined $612 billion in losses under a hypothetical severe downturn, the central bank said.

But that