The waiting game

17 November 2010 By Antony Currie Follow @AntonyMCurrie

Goldman is alone in paying out more than before the crash. Its rivals dividends remain depressed especially BofA s and Citi s. Even after big banks pass another stress test specified by the Fed on Wednesday, most need massive dividend hikes to restore precrisis payouts.

This content is for Subscribers only

Context News

The Federal Reserve on Nov. 17 unveiled guidelines for U.S. banks wanting to undertake capital actions such as increasing dividend payments or repurchasing or redeeming stock.

Before being allowed to undertake such actions, banks must have repaid all government investments, must demonstrate how they will meet Basel III capital requirements and must show their ability to absorb losses over a twoyear period according to stresstest scenarios designed by both the Fed and individual firms.

In a speech on Nov. 12, Fed Governor Daniel Tarullo said the U.S. central bank anticipated that some firms with high capital levels that have been retaining solid earnings for several quarters will be interested in increasing or resuming dividends.

Email a friend

Please complete the form below.

Required fields *