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Investors have used the award -winning banking oversight awards, as Wall Street’s largest banks announced on Tuesday flooding shareholders after undergoing regulatory stress tests that imposed easier conditions than in recent years.
JPMorgan, Goldman Sachs, Bank of America, Morgan Stanley and others banks They said they would raise quarterly payments to shareholders’ dividends. JPMorgan and Morgan Stanley also said they would return to their billions of dollars.
Goldman said he would collect his dividend 33 %. JPMorgan said it would increase its quarterly dividend of shares by 7 % in the next quarter.
Bank of America has said it will increase its quarterly dividend of shares 8 % starting from the same quarter. City and BNI also said they would increase their dividends by 7 and 13 percent, respectively.
Jpmorgan He said he would authorize the purchase of his own shares of up to $ 50 billion, while Morgan Stanley announced a $ 20 billion redemption program.
Higher payments reflect what analysts and investors consider it less serious regulatory environment For banks after more than a decade, close restrictions after the 2008 financial crisis.
Bank’s stock prices have been slightly changed since its release on Tuesday, but in recent days they have reserved benefits as investors have absorbed news of easier stress test requirements.
Federal Reserve last week confirmed that 22 banks – ranging from the largest, such as JPMorgan and Goldman Sachs to smaller players, including PNC and BNY – successfully Passed by annual tests Assessing their elasticity to potential economic and market crises.
Banks use the results to calculate the minimum level of capital they need in terms of risk-adjusted-which can again affect the amount of excess capital they return to shareholders. Capital is used by banks to absorb losses.
This year’s stress tests were the first since the Fed loosened his scenario with less severe theoretical recession than used the previous year. While the new test was designed before US President Donald Trump returned the office, it is in line with looser banking regulation, his administration advocated.
Morgan Stanley analysts said the Fed’s results were “even better than expected”, as they marked changes in the methodology that led to lower hypothetical losses, including changes in the way the regulator measured private capital exposure.
“A new era of bank regulation is here,” Morgan Stanley analysts wrote in the note for the beginning of this week.
The Fed said this year’s tests would fuel the aggregate ratio of Banks’ capital, their main loss cushion, reduced by 1.8 percentage points-far below the drop of 2.8 percent of points in last year’s exercise.
The Central Bank is expected to provide clarity in the coming weeks on whether to start using an average of the results of stress tests in the past two years to calculate banks’ capital requirements, a move that Vice President for Supervision Michel Baumann said it would help alleviate unstability.
As part of the wider pressure to facilitate banking regulation, the Fed and two other security guards announced last week that they plan to reduce the improved ratio of additional power, which sets how many capital the largest institutions should have against their total assets.
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