Posts by Central Banking

Bank of England Rapidly Expands Asset Purchase Facility

July 29, 2020

In response to the COVID-19 crisis, the Bank of England (BoE) has expanded its existing Asset Purchase Facility (APF) from GBP 445 billion to GBP 745 billion (USD 950 billion). Continue reading “Bank of England Rapidly Expands Asset Purchase Facility”

Dividend bans: ECB extends, APRA eases, and BoE promises further analysis

July 29, 2020

European, Australian, and British regulators took divergent paths on bank dividend guidance this week. Continue reading “Dividend bans: ECB extends, APRA eases, and BoE promises further analysis”

No bank should be paying dividends right now

July 14, 2020

This blog was published today in the American Banker . In the midst of one of the fastest and deepest economic declines in U.S. history, the largest banks are expected to pay out about $14 billion in dividends in the third quarter, while remaining under a cap imposed by the Federal Reserve in response to the coronavirus pandemic. Continue reading “No bank should be paying dividends right now”

U.S. Banks to Maintain Dividends for Now, Following Pre-COVID Stress Test

July 1, 2020

Most of the largest U.S. banks announced Monday that they will continue to pay dividends in the third quarter at the same level as the second quarter. This news comes just two business days after the Federal Reserve announced the results of its annual stress test and an unprecedented “sensitivity analysis” estimating the potential impact of different economic recoveries from the COVID recession on bank performance. Based on these scenarios, the Fed announced a number of temporary restrictions on dividends and other corporate actions. Continue reading “U.S. Banks to Maintain Dividends for Now, Following Pre-COVID Stress Test”

Federal Reserve Programs Involve More Risk than in GFC

June 17, 2020

In this post we consider the risk profiles of the programs that the Fed has implemented during the COVID-19 crisis as compared to those it adopted during the global financial crisis of 2007-09 (GFC) and the role of the Treasury's backstop in each instance. Continue reading “Federal Reserve Programs Involve More Risk than in GFC”