Four big banks in Pittsburgh are much better capitalized than they were during the Great Recession and could withstand a severe global economic downturn, the Federal Reserve said Thursday.

PNC Financial Services Group, Bank of New York Mellon, Citizens Financial Group and Huntington Bancshares were among 33 of the nation's largest financial institutions that passed muster with the Fed's annual “stress tests,” designed to push banks to bolster their reserves and restore badly shaken confidence in the banking system since the 2008 financial crisis.

Although all 33 banks would experience severe financial losses — $385 billion combined over nine quarters in the scenario outlined by the Fed — they would still hold up under extreme duress because they had bolstered the capital on their balance sheets and improved the quality of their loans, the Fed said.

The tests on Thursday were something of a dress rehearsal for the second round of stress test results next week, when the Fed reveals whether it has approved their plans to return capital to shareholders through dividends and share repurchases.

Thursday's results do not guarantee that the banks' capital plans will be approved, although PNC, BNY Mellon, Citizens and Huntington were all cleared to distribute capital following last year's tests.

Under the Fed's most extreme scenario in this year's test, the U.S. economy falls into a deep recession, causing the stock market to plunge by 50 percent. Unemployment climbs above 10 percent, housing prices drop by 25 percent and commercial real estate prices fall by 30 percent. Investors, in this scenario, would be so panicked that yields on short-term U.S. Treasuries would go negative — meaning even the safest of assets would lose money.

Federal Reserve officials change the stress tests each year to mirror what economic climate the world is experiencing. Other central banks have attempted negative interest rates, including the European Central Bank and Bank of Japan, to stimulate economic growth. So testing the largest U.S. financial institutions under negative interest rates is not outside the realm of possibilities.

No firm fell below the main capital thresholds for the second straight year.

Collectively, the 33 banks maintained at least 8.4 percent high-quality capital as a share of assets — called the common equity tier 1 capital ratio — well above the Fed's 4.5 percent minimum. The ratio is a measure of financial strength.

Columbus-based Huntington, the region's sixth largest bank by deposits, flirted with the minimum, however. The bank, which has 37 branches here, had a capital ratio of 5 percent. It was the lowest of the group.

Bank of New York Mellon was the best capitalized in the Pittsburgh market, showing a capital ratio of 10.5 percent under extreme circumstances. BNY Mellon is based in New York but employs more than 7,000 people in Pittsburgh.

The region's largest retail bank, PNC Financial Services Group, had a capital ratio of 7.6 percent — though, according to its own internal stress test, the ratio would be 8 percent.

That was still below its Rhode Island-based competitor, Citizens Financial Group, the region's second-largest bank with 125 branches. Citizens capital ratio in the Fed's stress test was 8.8 percent.

A spokesperson for Huntington wouldn't immediately comment. Officials from the other banks declined to comment beyond statements they issued about their results.

Chris Fleisher is a Tribune-Review staff writer. Reach him at 412-320-7854 or cfleisher@tribweb.com. The Associated Press contributed.

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