US banks pass stress tests

All but four of 19 major US banks got a green light from the Federal Reserve, after being declared strong enough to survive a downturn worse than the Great Recession.

The Fed’s findings signalled its confidence that the financial system, which nearly collapsed three and a half years ago, is healthy again.

JP Morgan Chase, Wells Fargo and other large bank holding companies that passed the Fed’s so-called stress tests raised their dividends and announced plans to buy more of their stock.

The news ignited a late-day rally on Wall Street, with the Dow Jones industrial average shooting up 218 points to its highest close since the end of 2007.