In June, the Fed put temporary caps on shareholder payouts by the nation’s biggest banks, including JPMorgan Chase, Bank of America and Wells Fargo, barring them from buying back their own stocks or increasing dividend payments. Regulators were trying to ensure that banks remained strong enough to keep lending as the economic fallout from the pandemic deepened. Now, the Fed is telling banks that they can distribute cash to shareholders through buybacks as well as dividends, as long as those total amounts are no greater than the average of a bank’s earnings over the past four quarters. Minutes after the regulator’s announcement on Friday, JPMorgan Chase said it would buy back $30 billion of its shares during the first three months of 2021. However, this year, because of the pandemic, the Fed also did a special round of analysis this month.

Source: New York Times December 18, 2020 21:39 UTC