Fed's Tarullo Warns Big Banks Against Rushing To Boost Dividends |
| Wall Street Journal - Nov 12, 2010 |
Big U.S. banks will need to show they meet high capital hurdles to restore or increase dividends they slashed during the financial crisis, a top Federal Reserve official said Friday.
Fed Gov. Daniel Tarullo said the U.S. central bank would soon issue "conservative" guidelines on how banks will be able to change their dividend policy in the first quarter of next year.
"We will expect firms to submit convincing capital plans that demonstrate their ability to absorb losses over the next two years under an adverse economic scenario that we will specify, and still remain amply capitalized," Tarullo said.
He was speaking at a George Washington University Law School conference on whether the U.S. regulatory overhaul approved in July adequately addresses the causes of the recent financial crisis.
To lure investors and after posting strong profits recently, many U.S. banks have been itching to boost payments to shareholders. But their ability to increase dividends has essentially been frozen as regulators scrutinized their use of capital in the wake of the crisis.
Read Full Article from Wall Street Journal
- Posted: 2010-11-12 10:20:47
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