Fed to End Restrictions on Bank Dividends and Share Repurchases on June 30
The Federal Reserve plans to end restrictions on large bank capital distributions such as dividends and share repurchases after the second quarter ends on June 30, the agency recently announced.
The plan is to put many large banks through one more round of stress testing, and banks with capital levels above their regulatory requirements as determined by stress testing will no longer be bound by the restrictions.
In stress testing, the Fed puts bank's balance sheets through a series of hypothetical economic scenarios to ensure that they can sustain loan losses and other headwinds during an economic downturn, while still maintaining enough capital to continue to lend.
Source Fool.com
