Biggest US Banks Boost Payouts After Lighter Fed Stress Test

(Bloomberg) – Some of the largest lenders of Wall Street increased their dividends after passing this year’s federal reserve stress tests, facilitating the cleaning of the regulators by softening some requirements put forward in previous years.

JPMorgan Chase & Co., Goldman Sachs Group Inc. and Bank of America Corp. were among the companies that increased the three -month payments after the FED’s annual examination last week.

Wells Fargo & Co. and Morgan Stanley and other major lenders increased their dividends. In addition, JPMorgan has allowed a reputation of a share of 50 billion dollars, and Morgan Stanley reintegrated a multi -year share receipt program up to $ 20 billion without expiration date.

An announcement from Citigroup Inc. still did not expect.

FED Exam – a product of the 2008 financial crisis – it tends to determine the tone for aggressive banks for refunding capital to shareholders through dividends and reputation. It requires banks to take into account the hypothetical crisis scenarios and to predict the losses they may face based on business books.

Last week, all of the 22 banks passed easily after determining that they would damage more than $ 550 billion. The results showed that “large banks are well positioned to ventilate a serious stagnation”.

The scenario in this year’s tests has led to fewer credit losses in a less serious scenario due to other factors, as well as the slight slowing of the US economy in 2024. The results were also affected by lower private capital losses and higher net income.

The FED announced last year that it plans to make changes in the process and in April determining capital requirements, he submitted an offer for average results for two years. Michelle Bowman, Vice President of Supervisory, said potential changes will help the agency’s “excessive volatility in stress test results and corresponding capital requirements”.

Likewise, the Fed explained plans to reduce the advanced additional leverage ratio that requires banks to hold a certain amount of capital according to their assets.

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