Washington DC, June 29 -- The Federal Reserve's annual bank stress test showed that large American banks are well-positioned to weather a severe recession, while staying above minimum capital requirements and continuing to lend to households and businesses, a statement from the US central bank said.

The stress test evaluates the resilience of large banks by estimating losses, net revenue, and capital levels -- which provide a cushion against losses -- under hypothetical recession scenarios.

The Federal Reserve's stress test assesses whether banks are sufficiently capitalized to absorb losses during stressful conditions while meeting obligations to creditors and counterparties and continuing to be able to lend to households and businesse...