(Bloomberg) -- Federal Reserve Chairman Jerome Powell said he sees no reason “at this time” why U.S. banks need to suspend dividends to preserve capital amid the deepening coronavirus economic crisis.
Powell, speaking Thursday on a Brookings Institution webcast, said lenders currently have strong capital buffers to absorb financial shocks. Powell added that the biggest U.S. banks have already halted share buybacks to preserve cash, a decision he called a “good thing.”
The Fed chairman's remarks echo those of U.S. bank leaders. Goldman Sachs Group Inc. Chief Executive Officer David Solomon said last week that he expects the firm to keep paying its dividend, adding that such distributions make up a much smaller part of capital returns to investors than buybacks. Morgan Stanley CEO James Gorman and Citigroup Inc. CEO Michael Corbat have also said their focused on maintaining their banks' dividends.
Questions about halting dividends have gotten a lot more attention after many European banks shelved them in response to the coronavirus pandemic.
©2020 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
