Fed Will Cap Large Bank Dividends and Ban Share Repurchases in Q4

The Federal Reserve said it would continue to restrict capital distributions for large banks in the fourth quarter, banning share repurchases and capping dividends to "a formula based on recent income."

The Fed formally began those restrictions on banks -- with more than $100 billion in assets -- in the third quarter. That included limiting dividends to an amount not greater than the average net income over the preceding four quarters.

The Fed also said it would not allow banks to pay out a dividend greater than what they paid in the second quarter. While those could be the same restrictions for the fourth quarter, the Fed did not specify the dividend formula in its initial statement.

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Source Fool.com