Biggest U.S. Banks Seen Weathering Severe Stress in Fed’s Tests

The Federal Reserve’s stress tests of big banks found all 33 have enough capital to withstand a severe economic shock, though Morgan Stanley trailed the rest of Wall Street in a key measure of leverage.

The results mark the second straight year all firms passed the annual exams’ first phase. The biggest cleared the most severe scenario handily, with one exception. Morgan Stanley’s projected 4.9 percent leverage ratio tied for last place alongside a Canadian bank’s U.S. unit, falling within a percentage point of the 4 percent minimum.

Since starting the annual tests after the 2008 meltdown, the Fed ...