WASHINGTON — The Federal Reserve said temporary limits on dividend payments and share buybacks will end for most banks after June 30, following the completion of annual stress tests to determine their resilience to a hypothetical downturn.

“The banking system continues to be a source of strength and returning to our normal framework after this year’s stress test will preserve that strength,” Randal Quarles, the Fed’s vice chairman of supervision, said Thursday.

The Fed initially placed restrictions on bank payouts last summer, citing the need to conserve capital during the coronavirus-induced downturn. It barred buybacks and capped dividends so that they would not exceed a bank’s recent profits.

An expanded version of this article is available at WSJ.com.

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