“The Federal Reserve is expected to allow a number of the big U.S. banks to hike dividends to as much as 26% of earnings as part of the latest round of stress test results to be released Thursday afternoon, according to analysts and attorneys.”
“’Even with stressful scenarios, the stress tests will demonstrate that banks are in a stronger place, far stronger than in 2008,’ said Fred Cannon, director of research at Keefe, Bruyette & Woods Inc. in Washington. ‘We think companies like J.P. Morgan Chase, Wells Fargo and U.S. Bancorp will show meaningful increases in dividend and share repurchase plans.'”
“The central bank said it will release the results of stress tests conducted on 19 banks with more than $50 billion in assets on Thursday at 4:30 p.m.”
“Dennis Kelleher, the president and CEO of advocacy group Better Markets, noted that banks didn’t prepare for the crisis that occurred in 2008 and as a result institutions should be forced to conduct really tough stress tests examining scenarios.”
“’Banks need to put in place really tough stress tests and include scenarios that people won’t believe will happen because that is what happened,’ he said. ‘The only way to prepare for next time is to test for that what you don’t expect.’”
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