Warning: session_start(): open(/tmp/sess_cea5e2500b91a0fd369f28b4c0c53bd2, O_RDWR) failed: Disk quota exceeded (122) in /home/customer/www/lmbcbusiness.com/public_html/wp-content/themes/lmbc-news/functions.php on line 238

Warning: session_start(): Failed to read session data: files (path: /tmp) in /home/customer/www/lmbcbusiness.com/public_html/wp-content/themes/lmbc-news/functions.php on line 238
Fed extends share buyback ban on US banks into Q4 - LMBC Business
White House ‘Social Media Summit’: No Facebook, No Twitter, No Transparency CopyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more White House ‘Social Media Summit’: No Facebook, No Twitter, No TransparencyRead more Twitter to Label Tweets by Leaders Who Break Its RulesRead more Twitter to Label Tweets by Leaders Who Break Its RulesRead more Twitter to Label Tweets by Leaders Who Break Its RulesRead more Twitter to Label Tweets by Leaders Who Break Its RulesRead more

Fed extends share buyback ban on US banks into Q4

Print Friendly and PDF

Oct 01, 2020 - 09:59 AM

WASHINGTON — The Federal Reserve on Wednesday extended a ban on share buybacks by US banks into the fourth quarter, aiming to ensure they have sufficient capital to weather the coronavirus downturn.

“For the fourth quarter of this year, large banks — those with more than $100 billion in total assets — will be prohibited from making share repurchases,” the central bank said in a statement.

“Additionally, dividend payments will be capped and tied to a formula based on recent income. The capital positions of large banks have remained strong during the third quarter while such restrictions were in place.”

The announcement comes after the cental bank in June ordered 34 major US banks to suspend buybacks in the third quarter and limit dividend payments.

The decision was the first such move since the 2008-2010 global financial crisis and came after the Fed announced the results of its banking system stress tests for the year.

The stress test results varied depending on the severity of the downturn modeled, but Fed Vice Chair Randal Quarles at the time said the outcomes were generally positive.

In its Wednesday announcement, the Fed said it would conduct a second stress test later this year.

The central bank rolled out trillions of dollars in liquidity to stop financial markets from seizing up as the coronavirus forced businesses to close in mid-March, sending unemployment spiking to 14.7 percent in April, though it since moderated to 8.4 percent in August.

  • bio
  • twitter
  • facebook
  • latest posts

LMBCBUSINESS.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.