- Oops!Something went wrong.Please try again later.
By Elizabeth Dilts Marshall
NEW YORK (Reuters) - The United States' biggest banks will stop buying back their own shares, and will instead use that capital to lend to individuals and businesses affected by the coronavirus, an industry trade group said on Sunday.
The Financial Services Forum said its eight members - JPMorgan Chase & Co <JPM.N>, Bank of America Corp <BAC.N>, Citigroup Inc <C.N>, Wells Fargo & Co <WFC.N>, Goldman Sachs Group Inc <GS.N>, Morgan Stanley <MS.N>, Bank of New York Mellon Corp <BK.N> and State Street Corp <STT.N> - would each halt share repurchases through June 30.
"The COVID-19 pandemic is an unprecedented challenge for the world and the global economy and the largest U.S. banks have an unquestioned ability and commitment to supporting our customers, clients and the nation," the group said in a statement, referring to a severe and sometimes fatal respiratory infection that stems from the coronavirus.
The decision follows pressure from some U.S. lawmakers, who last week urged big banks to stop using funds to repurchase shares and instead support customers and the broader economy.
It also comes within hours of the U.S. Federal Reserve slashing interest rates further and Wall Street's home city, New York, detailing plans to close schools and senior centers, and toughen enforcement of restrictions on bars and restaurants.
Federal Reserve Chairman Jerome Powell said on a call with reporters the Fed has given broad general guidance to the banks to "use their buffers to provide loans and also to work with their borrowers."
"We hear the banks saying that is exactly what they are going to do, so that's a good thing," Powell said.
The Financial Services Forum said its 8 member banks have grown their collective capital by more than 40% in the last decade to $914 billion.
"(It is) our collective objective to use our significant capital and liquidity to provide maximum support to individuals, small businesses, and the broader economy through lending and other important services," according to the group's statement.
The group said the banks' decision was consistent with actions by the Fed, the White House and Congress, and that every bank is free to re-start share repurchases before June 30 if circumstances change.
JPMorgan, the largest U.S. bank, said in a separate statement that it will use the extra funds to support lending to individuals, business owners and governments, and add liquidity in capital markets, "even if circumstances get dramatically worse."
(Reporting by Elizabeth Dilts; Writing by Lauren Tara LaCapra; Editing by Daniel Wallis and Chizu Nomiyama)