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Coronavirus forces Fed to extend ban on bank stock buybacks, dividends

Jennifer Schonberger
·1 min read

Big banks such as JPMorgan and Wells Fargo will have their hands tied for the rest of the year when it comes to buybacks and dividend hikes and the coronavirus is to blame.

The Federal Reserve is extending its ban on both as the pandemic remains a risk to the economy, policymakers disclosed late Wednesday.

FED TO KEEP RATES NEAR ZERO THROUGH 2023 TO ASSIST ECONOMY

Chairman Jay Powell has spoken frequently about the uncertainty the pandemic has placed on the U.S. economy and the need for further stimulus.

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The move will ensure large banks, those with $100 billion or more in total assets, retain enough capital in the face of the pandemic which continues to weigh on economic growth and unemployment.

COVID-19 CRUSHES BANK M&A

Later this year, the Board will conduct a second stress test to further evaluate the resiliency of large banks with the results released by the end of the year.

MNUCHIN-PELOSI KEEP STIMULUS TALKS ALIVE BUT NO DEAL YET

The Fed's decision comes as lawmakers on Capitol Hill have not been able to come to a deal on new stimulus even after Fed officials have repeatedly called for more assistance for the economy-- and as layoffs could intensify with airlines ready to cut workers starting Thursday.

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