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Fed reports strengthened banks

WASHINGTON — The ­nation’s largest banks are more prepared to withstand a severe recession and global downturn than at any time since the 2008 financial crisis, the Federal Reserve said Thursday.

The Fed’s latest annual ‘‘stress tests’’ show that the 18 banks hold fewer bad loans, compared with last year, because they have been helped by a stronger economy. The Fed will announce next week whether it will approve the banks’ plans to issue dividends and repurchase shares.

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Under the stress tests’ most severe scenario, the United States would undergo a recession in which unemployment would reach nearly 12 percent, stocks would lose half their value, and home prices would plunge by 20 percent.

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