Giant US banks have passed the Fed's stress test.

The five largest U.S. banks said Friday they will return more cash to shareholders after passing the Fed's stress tests early last week, a show of strength that reinforces the gap between the industry giants and smaller regional rivals.

JPMorgan Chase $JPM+0.6%, Wells Fargo $WFC+1.5%, Goldman Sachs $GS+0.8%, Morgan Stanley $MS+1.6% and Citigroup $C+1.2% have announced plans to raise their quarterly dividends, with increases ranging from 2 cents to 25 cents. Goldman's was the largest and Citigroup's was the smallest.

Many also touted the results of their regulatory exams, which the Fed released after assessing whether 23 institutions would be able to withstand the "nasimulus" of a severe global recession characterized by 10% unemployment and a 45% stock market plunge. Banks were not allowed to return any cash to shareholders until they received a "pass" grade. Bank of America $BAC+0.7%, the nation's second-largest bank, made no announcement Friday.

U.S. bank stocks ended June the best in months. The KBW Bank Index closed up more than 5% and the KBW Regional Bank Index rose 3%.

JPMorgan CEO Jamie Dimon, who runs the country's largest bank, said the tests showed that banks are "resilient" and "continue to serve as a pillar of strength for the financial system and the broader economy."

Personally, I have the most banks in my portfolio $BAC+0.7% and then second $JPM+0.6%. This news is obviously good. It shows that the sector has stabilized and there is no fear of another crash. On the other hand, as much as I like the banks, it's scary that they can just get their printing presses going again and the whole merry-go-round will go again. Plus, when the Fed sees that the banks are stable, they don't have to worry about raising interest rates again. So we'll see, either way, good news for holders of these titles. 😊