By Pete Schroeder WASHINGTON (Reuters) – The U.S. Federal Reserve will release the results of its annual bank health checks on Thursday. Under the “stress test” exercise established following the 2007-2009 financial crisis, the Fed tests banks’ balance sheets against a hypothetical severe economic downturn, the elements of which change annually. The results dictate how much capital banks need to be healthy and how much they can return to shareholders via share buybacks and dividends. How well a bank performs dictates the size of its “stress capital buffer” – an extra cushion of capital the Fed…