Large US banks will no longer face restrictions

Large US banks will no longer face restrictions on dividend payments or share repurchases. According to the US Federal Reserve, the stress test showed that commercial banks will remain sufficiently capitalized even in the event of a significant economic downturn, stock markets and rising unemployment. The Federal Reserve said on Thursday that, based on the results of an annual stress test, 23 large US banks would lose $ 474 billion (€ 397.12 billion) in the event of a sharp economic downturn. However, they would still have about twice as much capital left as the Fed requires. Due to the successful result of the stress test, the central bank will lift the restrictions on the payment of dividends and share repurchases that it introduced after the onset of the new coronavirus pandemic. Analysts estimate that banks such as JPMorgan Chase, Bank of America and Goldman Sachs will be able to pay out a total of more than $ 100 billion over the next four quarters. "A year ago, the central bank responded to the great uncertainty that ensued as a result of the pandemic and called on banks to be particularly careful," said Christopher Marinac of Janney Montgomery Scott. However, after the test, the banks will be able to return to the original regime. The stress test assumed an increase in the unemployment rate to 10.75%, a fall in stock markets by more than 50% and a decline in the economy by 4%, which would be reflected in high losses in the commercial real estate market. Of the individual banks, the US division of Deutsche Bank finished the best, the US division of the British bank HSBC showed the worst results, but it also passed the test.