Federal Reserve: restrictions on bank dividend and share repurchase extended to the end of this year

category:Finance
 Federal Reserve: restrictions on bank dividend and share repurchase extended to the end of this year


The annual stress test released by the Federal Reserve in June showed that all big banks are well capitalized. The Fed said that in view of economic uncertainty, the Fed has introduced a number of restrictions to ensure that banks capital can absorb loan losses. This year, the Fed will also conduct a second stress test on big banks, and the results will be released by the end of the year.

Randal Quarles, the Federal Reserves vice chairman in charge of regulatory affairs, previously said that the new stress test would affect the Feds decision on bank dividend and repurchase in the first half of next year, and he hoped the test results would restore normal order to the banking industry. In this weeks voting on the decision to extend the limit, Federal Reserve governor Lael brianard was the only senior Fed official to vote against it. She has previously said that allowing banks to allocate capital creates a lot of risk, and in times of challenge, banks need to raise capital or limit lending. Comments suggest that the Feds decision to extend the limit may disappoint banks like JPMorgan that have hinted that they intend to restart repo. After the announcement of the Feds decision, JPMorgans shares, which closed up nearly 1% on Wednesday, fell after hours, falling nearly 0.8%. Source: Wall Street news editor: Wang Xiaowu_ NF

Randal Quarles, the Federal Reserves vice chairman for regulatory affairs, had previously said the new stress test would affect the Feds decision on bank dividend and buyback in the first half of next year, and he hoped the test results would restore formal order to the banking industry

Federal Reserve governor Lael brianard was the only senior Fed official to vote against this weeks decision to extend the limit. She has previously said that allowing banks to allocate capital creates a lot of risk, and in times of challenge, banks need to raise capital or limit lending.

Comments suggest that the Feds decision to extend the limit may disappoint banks like JPMorgan that have hinted that they intend to restart repo.

After the announcement of the Feds decision, JPMorgans shares, which closed up nearly 1% on Wednesday, fell after hours, falling nearly 0.8%.