After the Federal Reserve released the results in December of its first mid-cycle stress test, designed to test large banks’ resilience against downside pandemic scenarios, it allowed large banks to resume share buybacks starting in the first quarter of 2021, subject to limits. Fed Governor Lael Brainard cast the lone dissenting vote, noting the risks to bank capitalization and lending of raising payout limits to a level that “nearly doubles the amount of capital permitted to be paid out relative to last quarter.” In the case of the six largest banks on the heels of strong trading and investment banking revenues, however, aggregate payouts are set to triple.
Continue reading “Largest Banks' Capital Set to Moderate, Payouts to Triple” 
