The US Federal Reserve is confident that Wall Street could continue to lend through a deep recession, after its latest tests on the financial health of the country's biggest banks, write Ryan Tracy and Telis Demos for The Wall Street Journal.

In the first round of its annual bank stress tests, the Fed on Thursday said that 34 of the largest lenders in the US - including Goldman Sachs, JP Morgan, Morgan Stanley, Bank of America and Citigroup - had made significant improvements to their defenses since the 2008 financial crisis. A second round of testing will take place next week.