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MNI BRIEF: Fed Modifies Bank Capital Distribution Rules

WASHINGTON (MNI)

The Federal Reserve said Friday its stress tests showed the nation's largest banks are healthy and resilient despite the shock to the financial system from the Covid-19 pandemic.

While capital requirements aren't changing, the Fed modified its restrictions on dividends and share repurchases. "For the first quarter of 2021, both dividends and share repurchases will be limited to an amount based on income over the past year. If a firm does not earn income, it will not be able to pay a dividend or make repurchases."

"Large banks could continue to lend to households and businesses even during a sharply adverse future turn in the economy," Randal Quarles, Fed Vice Chair for Supervision, said in a statement.

MNI Washington Bureau | +1 202 371 2121 | pedro.dacosta@marketnews.com
MNI Washington Bureau | +1 202 371 2121 | pedro.dacosta@marketnews.com

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