The Fed is giving the green light to banks to resume paying divvies. I guess this means things are okay, everything is getting back to normal. This must also mean their extraordinary accommodation via zero interest rates should be ending soon as well, right?
“The Federal Reserve cleared some of the 19 largest U.S. banks to increase dividends, buy back shares or repay government aid after “significant improvement” in their capital and the economy.
The banks, including firms such as Goldman Sachs Group Inc. and JPMorgan Chase & Co., have increased common equity by more than $300 billion from the final quarter of 2008 through the end of 2010, the Fed said in a paper released today in Washington on its most recent review of bank capital.”
Here is the punchline to the joke:
“Overall, both the quantity and quality of capital at many large bank holding companies have improved since the financial crisis,” the Fed said. “The return of capital to shareholders under appropriate conditions is a step in the process of improvement in the financial sector and will help to promote banks’ long-term access to capital.”
If I didn’t see the humor, I might end up crying . . .
Fed Says Some Banks Can Resume Dividends After Stress Tests
Craig Torres and Josh Zumbrun
Bloomberg, March 18 2011