Fed falls short of dividend ban after pandemic stress test

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By Tyler Davies
26 Jun 2020

The Federal Reserve has come under fire for failing to oblige banks to stop paying dividends at a time of extreme economic uncertainty. The results of its latest stress test showed this week that a quarter of US banks could approach their minimum capital ratios if the coronavirus pandemic leads to a double-dip recession.

The Fed had tweaked the form of its regular stress testing process to try and work out how bank capital levels could change in the economic fallout from Covid-19.

It developed three new scenarios: a V-shaped recovery for the economy, a U-shaped recovery and a W-shaped double ...

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