WASHINGTON (Reuters) – The U.S. Federal Reserve will still rely on a stress test built before the onset of the coronavirus pandemic to set big bank capital requirements, and rely on extra pandemic-specific analysis to inform whether banks can pay out funds to investors, a top official said Friday.
Fed Vice Chair Randal Quarles said in a speech that the Fed is testing banks against three possible economic trajectories of varying severity to see how they perform, citing “unprecedented uncertainty” about the pandemic’s long-term economic impact. Those results will help the Fed decide whether banks can pay out extra funds to investors via dividends or share repurchases.
(Reporting by Pete Schroeder; Editing by Chizu Nomiyama)
