Fed: 17 out of 18 US banks pass stress test

The Federal Reserve has said US banks have enough capital to survive a severe economic downturn, as 17 out of 18 major institutions passed its annual stress tests.

The only bank to fail was government-controlled Ally Financial, the rescued former finance arm of General Motors, the BBC reports. Wall Street banks Morgan Stanley, at 5.7%, and Goldman Sachs, at 5.8%, were the next two lowest. The minimum tier one capital ratio needed to pass the test is 5%. "The nation's largest bank holding companies have continued to improve their ability to withstand an extremely adverse hypothetical economic scenario and are collectively in a much stronger capital position than before the financial crisis," the US central bank said. Under the tests, which be...