Federal Reserve Stress Tests Put Big Bank Shareholder Payouts On The Line
June 28, 2016
The biggest U.S. banks face their toughest test of the year Wednesday, as the U.S. central bank hands down its yearly assessments of financial institutions’ ability to withstand various economic challenges.
A weak assessment by the Federal Reserve wouldn’t just mean a black mark on a bank’s record — billions of dollars in potential shareholder payouts hang in the balance. If the Fed finds fault in a bank’s plans, management must trim its dividend distributions and share buybacks.