Yale School of Management

Posts by Central Banking

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.

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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. 

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