The US Federal Reserve gave the green light last night to plans by all 34 large US banks seeking to provide big payouts to shareholders after the firms passed the annual stress tests.
It is the first time since the tests were instituted in 2009 the Fed did not object to the banks' capital plans.
The decision reflects the industry's improved resilience after years of building up capital in the aftermath of the 2008 financial crisis, Fed officials said.
The Fed required just one bank, Capital One Financial, to submit a new capital plan by the end of the year, but did not oppose shareholder payouts under the program, the Comprehensive Capital Analysis and Review (CCAR).
"I'm pleased that the CCAR process has motivated all of the largest banks to achieve healthy capital levels and most to substantially improve their capital planning processes," Fed Governor Jerome Powell said in a statement.
The results were expected to lead to hefty dividend and share buybacks at large banks, such as Bank of America and Morgan Stanley, as well Wells Fargo, which has suffered following its fake accounts scandal.
The stress test is designed to examine how large US banks would handle a financial crisis akin to the one in 2008.
The first phase of the test, released last week, showed all 34 banks could withstand a downturn in which US unemployment soared to 10%and commercial property prices plummeted 35%.
The second phase of the results followed qualitative and quantitative examinations of large banks.
In the case of Capital One, despite getting approval for its payouts, the bank "exhibited material weaknesses in its capital planning practices," the Fed said.
It cited concerns about planning in "one of its most material businesses" and issues with internal controls.
A senior Fed official said it could block Capital One from making capital distributions down the road if it does not meet expectations.
American Express was initially projected to have insufficient capital under the stressed scenario, but later cleared the hurdle after submitting an adjusted capital payout plan, the Fed said.