Fed to Weigh Bank Dividends After Ending Covid Capital Break
- Hard stance on SLR could allow Fed to shed bank dividend limit
- Powell has said that announcement is ‘a couple of weeks away’
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The Federal Reserve may have little reason to continue restricting bank dividends now that it’s ended a pandemic-driven capital break for Wall Street.
In the face of Covid-19, the regulator had banned stock buybacks and limited the dividends at the biggest banks, saying the industry needed to build a cushion against the losses expected during the economic crisis of the last year. The central bank already let the banks re-start buybacks, but it continued to constrain dividends. Now, the Fed is saying the industry has plenty of capital, which raises questions about what’s next with that dividend limit.