STEVE INSKEEP, HOST: Some other news. The country's biggest banks are in much better shape than before the financial crisis, at least according to the Federal Reserve's third round of so-called stress tests.</s>STEVE INSKEEP, HOST: NPR's Dan Bobkoff reports.</s>DAN BOBKOFF, BYLINE: The tests simulate a nightmare scenario: How would the banks fare if unemployment topped 12 percent, stock prices were cut in half and housing values fell 20 percent? We all know what happened five years ago when a crisis was more than hypothetical.</s>DAN BOBKOFF, BYLINE: During the stress tests' scenario, only one of the 18 largest banks would not have been able to survive on its own. That's based on current capital and past dividends. The outlier was Ally Financial.</s>DAN BOBKOFF, BYLINE: Karen Petrou is with Federal Financial Analytics.</s>KAREN PETROU: The biggest banks are a lot stronger than they were before the crisis, and they're getting stronger still.</s>DAN BOBKOFF, BYLINE: In a statement, Federal Reserve Governor Daniel Tarullo said the tests are a tool to gauge the resiliency of the financial sector, and he commended the increase in both quality and quantity of bank capital during the past four years.</s>DAN BOBKOFF, BYLINE: Next week, the Fed looks at what the banks actually want to do, like issue dividends or new shares. Petrou says then, the Fed will come back and give each bank a yea or nay on its plans.</s>KAREN PETROU: And, that's what the corner office at each one of these banks is desperate to know.</s>DAN BOBKOFF, BYLINE: Those results come out next Thursday.</s>DAN BOBKOFF, BYLINE: Dan Bobkoff, NPR News, New York.
The Federal Reserve has released the results of another round of "stress tests" on the nation's biggest banks. Most did well, with 17 out of 18 passing. But some banks were better prepared than others to withstand a sharp downturn.