Fed Gives Bank Dividend Green Light - Full Release

Tyler Durden's picture

Following the clusterflock of black swans that has hit world markets in the past month, the Fed has realized it needs to act quick to distribute money to undercapitalized bank shareholders ahead of the upcoming bank sector bail out, which will naturally be funded by taxpayers all over again. According to the Fed, the 19 worst banks in America (in other words those that are allowed to issue dividends) are: Ally Financial Inc. (no, really, f/k/a GMAC is healthy), American Express Company, Bank of America Corporation, The Bank of New York Mellon Corporation, BB&T Corporation, Capital One Financial Corporation, Citigroup Inc., Fifth Third Bancorp, The Goldman Sachs Group, Inc., JPMorgan Chase & Co., Keycorp, MetLife, Inc., Morgan Stanley, The PNC Financial Services Group, Inc., Regions Financial Corporation, State Street Corporation, SunTrust Banks, Inc., U.S. Bancorp, and Wells Fargo & Company. The surge in share prices of the mentioned banks confirms that this is nothing but the latest round of Fed-endorsed taxpayer rape, which nobody can do anything against as the Fed is an "unsupervised" entity, DC is owned by Wall Street, and the peasantry is downloading porn on their iPad.

Full Fed press release:

The Federal Reserve on Friday announced it has completed the Comprehensive Capital Analysis and Review (CCAR), its cross- institution study of the capital plans of the 19 largest U.S.
bank holding companies.

As a result of the CCAR, some firms are expected to increase or restart dividend payments, buy back shares, or repay government capital. The Federal Reserve on Friday will discuss the reviews and its decisions with firms that requested a capital action.
All 19 firms will receive more detailed assessments of their capital planning processes next month.

In February 2009, the Federal Reserve advised bank holding companies that safety and soundness considerations required that dividends be substantially reduced or eliminated. Since that time, the Federal Reserve has indicated that increased capital distributions would generally not be considered prudent in the absence of a well-developed capital plan and a capital position that would remain strong even under adverse conditions.

The Federal Reserve’s actions on capital distributions come after significant improvement in both economic conditions and the capital positions of financial institutions. From the end of
2008 through 2010, common equity increased by more than $300 billion at the 19 largest U.S. bank holding companies. Moreover, conclusion of the Basel III agreement to increase capital requirements and passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act have substantially clarified the regulatory environment in which these firms will be operating.
The return of capital to shareholders under appropriate conditions is a step in the process of improvement in the financial sector and will help to promote banks’ long-term access to capital. Such access will support lending to consumers and businesses. The capital plan reviews foster appropriate capital distributions in a measured fashion while still helping to ensure continued increases in firms’ capital bases.

These supervisory reviews by the Federal Reserve come in the context of a significant change in supervisors’ expectations for firms’ substantive capital policies and capital planning processes. Among other things:

Firms are expected to demonstrate their ability to remain viable financial intermediaries as they make the planned capital distributions, even under stressed conditions;

Firms are expected to continue to increase their capital base; In 2011, firms generally are expected to limit dividends to 30 percent or less of anticipated earnings;

Planned share repurchases will be reviewed if there are material adverse deviations from the revenue and loss assumptions in a firm’s capital plan such that capital is not increasing as anticipated; and

In the event of a sharp deterioration in economic conditions that could have negative implications for safety and soundness, the Federal Reserve may require modification of previously submitted capital plans.

The CCAR involves a forward-looking, detailed evaluation of capital planning and stress scenario analysis at the 19 large bank holding companies. Although it was not standardized to the degree the Supervisory Capital Assessment Program (SCAP) was in early 2009, it builds on the experience gained during that exercise. In the CCAR, the Federal Reserve assessed the firm’s ability, after taking into account the proposed capital actions, to maintain sufficient capital levels to continue lending in stressed economic environments, including under an adverse scenario specified by the Federal Reserve. The adverse scenario was intended to represent developments in a typical recession, with a decline in economic growth, a rise in unemployment, and a sharp drop in risky asset prices (for details, please see Comprehensive Capital Analysis and Review: Objectives and Overview, attached). Federal Reserve supervisors carefully analyzed and adjusted as appropriate projections of stressed revenues and losses provided by the firms in the CCAR.

It is important to note that there are a number of reasons why firms participating in the CCAR may not be making capital distributions this quarter. For example, a firm may not have requested approval of any such action, Federal Reserve supervisors may have believed a requested distribution was too high at this time and could weaken the firm’s ability to weather adverse economic conditions, or supervisors may not have been comfortable with the capital planning process underlying the request. Firms may resubmit capital proposals each quarter, with their prospects for an answer of no objection dependent on their responses to any concerns raised during the CCAR.

Comprehensive Capital Analysis and Review: Objectives and Overview (230 KB PDF)


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scatterbrains's picture

lol just wait for another no fly zone.. no really.. well maybe no?  Never mind

Azannoth's picture

The Arab kings must feel pretty stupid endorsing the tradition of the 'Friday Prayers' what better people gathering ocation can you get where all reason goes bye bye and emotions can spread like a wild fire, they can't ban it they cant use police to disperce the crown every friday they are between a mosque and a hard place

pendragon's picture

according to cnbc the saudis are providing more funding for the religious police. probably friday prayers on their mind

Bananamerican's picture

off/on topic

i posted on Marketwatch to skip the spin and git over to ZH for the truth...and Harry Wanger responded "ZH are doomers etc". I said he was a well known shill...5 minutes later my comment was deleted...Is he a wheel at MW or something?

The Axe's picture

Can I get a coffee pot with my ass raping?

101 years and counting's picture

yep.  they'll break it over your head when they're done raping you.

slewie the pi-rat's picture


better start stretching now!

ponzi has a really big loaf!

alien-IQ's picture

this FED decision should lay to rest any sliver of doubt that may have remained about our status as a full blown Banana Republic.

gmrpeabody's picture

Sure explains the last hour of trading yesterday, as them on the inside got to act prior to us lumpkins. Mary, dear, the boys would like some donuts brought in as soon as you can, ok hun?

DB Cooper's picture

Where is Elizabeth Warren's Consumer Financial Protection Bureau?   Another effin brilliant idea (read waste of money). 

alien-IQ's picture

Giethner and Bernanke did to her what Greenspan and Rubin did to Broksley Born.

She never stood a chance.

Waterfallsparkles's picture


Now that is really funny.  I do remember getting all kinds of gifts for opening High Yeild Savings accounts.  My Mother and I would run from Bank to bank transfering money for the Gifts.  Put in one take it out of another.  Rince and repeat. We also made great interest.  That must have been when Volker was the Fed head.

TruthInSunshine's picture

I would start a poll somewhere, for the general population, as to whether they'd support QE3, but they'd probably confuse it with a cruise ship or movie sequel.

And this is why The Bernank need not be worried, for he can literally run the table.


In the meantime, more hollow words:

03-18 11:09: EU's Juncker says inflation is the enemy, and need price stability
rubearish10's picture

Can't afford to make a market negative decision. This cannot be a surprise to anyone.

alien-IQ's picture

It's no longer called corruption. Now it's called "Free Market Capitalism"

hedgeless_horseman's picture

The hubris of not holding back the announcement until 4:59pm on a Friday is telling.

Larry Darrell's picture

They are not fools.  They know that in the grand ole USSA everyone has been distracted since the first round games tipped off yesterday afternoon.

As such, they could hold a press conference right now announcing that payroll taxes are going up effective immediately with all funds going directly into private accounts, and the only crying from the populace would be directed not at them, but at referees who make bad calls.

Got to have priorities you know.

Oh regional Indian's picture

When I hear FED, I'm reminded of the Boa in Jungle Book, Swaying, eyes mesmersing, softly singing "Trust in meeeeeee, trust in meeeeeeee"..


slewie the pi-rat's picture


you're not the only one, symbol swami.  the "world's greatest conspriacy theorist" has been hammering on asp-ness of the rothschild viperz for weeks, now!

here's the one and only R.D.Bradshaw, from goldSeek.com, this date: 

The Goldsmiths, Part CLXXXV

enjoy, you old snake-charmer, you!

economessed's picture

So how does the logic work now?  The nation's money center banks are healthy enough to resume paying (larger) dividends due to vastly improved economic circumstances.

How does Bernank then justify QE^3?  Is the dollar too high?  Interest rates too high?  Food and fuel prices too low?  Foreign governments too stable?  Are we that starved of liquidity?

LawsofPhysics's picture

I was thinking the same thing.  How can he now justify more QE?  One can only guess that corruption is at an all time high and Ben figures he can now do whatever he wants, screw the peasants bring on WWIII if they don't like it.  I certainly don't see this as a "good" sign, but will always buy the rumor and sell this news as long as fraud remains the status quo.

Confused's picture

Also my first thought. But will it matter? They would be able to ram QE3+ down everyones throats regardless. Or so it seems. 

Sancho Ponzi's picture

Central Banker Rule #1: (there's no need for rule #2) 

Ample liquidity ensures peasants will occupy their time playing 'Angry Birds', watching 'American Idol' and tweeting their posse from newly acquired iPads rather than storming said bankers' primary residences armed with torches and pitchforks.

MachoMan's picture

The point is, at the very least, to get people to pile into the notion of austerity...  that QE will be withdrawn...  whether you believe them is your business.  [again, these people and they puppet masters make their money on the volatility and know everything ahead of time].  I personally think that the FED is temporarily screwed and needs to let off some commodity steam before ramping again.  How many ramps it takes before people throw their hands up and toss the dollar is anyone's guess...  presuming we even get a pullback.

Waterfallsparkles's picture

Great thought Macho Man.

What the FED will probably do is to let QE2 die and let (or create) a market CRASH.  Of course all of the Major Banks will know this and Short the Market. Then as you say let some of the steam out of the Oil market.  Then everyone will cry for QE3.  Banks will then cover their shorts and go long into the FED QE3 pump.

Just as Americans are celebrating the growth in their Brokerage Accounts they wipp the rug out from under them again.  So, they will beg for QE3.

Makes a lot of sense.

slewie the pi-rat's picture



damn!  you are a smart wench!  there are some primo women around who burned their bras decades ago and have great nipples, too!

JollyRoger's picture


Get real my fellow peasant!  The Fed would only need to justify more QE in a democratic society.  The need to justify monetary policy decisions that are charged to the taxpayers is really getting old in this day in age anyways.  It was merely a formality back in the days when the public cared, and had a pair.

SRV - ES339's picture

Rickards says the Fed has enough in maturing treasuries for 'QE to infinity' (do not believe QE winding down BS).

No worries... everything's rosie, but... interesting that the Fed will not release stress test data on these same 'healthy" banks... hmmmmm.

MJ's picture

Ive spoken to Rickards about this.  $750 Billion (Rickards number) a year is optimistic, and assuming that $1 Trillion in MBS holdings will paydown within 2 years of QEII ending.  But using fed data as of March 9th I did get to $515 Billion the first year, followed by $565 and $590 the following two years, of maturing assets which the fed will use to purchase additional assets (then the maturing assets should drop by $200B and stay pretty constant).  Again, that's assuming the MBS paydown rate is equal to that which happened from Aug 2010 to now (which I'm not sure is possible), and not accounting for interest, which no longer needs to be paid to Treasury but can be held by the Fed with an IOU (speculated to be about $90 B a year).

gordengeko's picture

Flockit, time to start crushing those iodine pills, rolling up the beji's and clearing the nostrils for some bill bixby/peter parker moments! 

Innocent Bystander's picture

Another one of those indirect market stimulus to get the ipad porn peasantry to buy into the market... Things are moving so, and like I'v said before Dr.
B lost control over his experiment weeks ago, these are just desperate measures, similar to TEPCO using buckets of water to cool down FUKU - IB

tom a taxpayer's picture

aaaaaAAAARGH! I need more vaseline.

The Butchers Dog's picture

You can get Crisco with your food stamps/ration card.  better bang for the buck so to speak.

AldoHux_IV's picture

Another attempt at propping up a failed system-- this should be a non-event as everyone knows these institutions are zombies that prey on the taxpayer.  Anyone or pension fund that decides to up their stake or begin to invest in these ponzi's deserves to go down when the system finally fails.

Northeaster's picture

Did BAC see this before release? Lots of 4-filings, especially that HCA Holdings Inc., what gives?



SwingForce's picture

SunTrust hasn't paid back $4.8 Billion in TARP funds yet, how are they allowed to pay a dividend???

Hedger306's picture

Regions is in that same boat and is still bleeding money.  They owe several billions but now they are allowed to pay out higher dividends.  Doesn't really matter how much the dividend is with Benny Bucks though since soon you will have to take a wheelbarrow full of them to buy your copy of Hustler.

plocequ1's picture

"Peasantry is downloading porn on their iPad"

Any links Tyler? I like Old school Nina Hartley

Byte Me's picture

So when are we likely to see some burnin' an' hangin' of these corrupt venal arsewipes?

Hondo's picture

This is insane.......the banks are corrupt and protected by a corrupt government.  Our government is a failure in the first degree.........we have complete corruption now.

Cdad's picture

The criminal syndicate known as Wall Street is indeed running the table, looting the treasury, and destroying the nation.

Unless and until corrupt bankers are removed from the system, tax payer funds are returned to the treasury, large banks are broken up, and at least 100,000 folk from the financial services industry in NY, NY are released from their jobs, there is no chance of financial recovery from the Greater American Depression...as massive US debt looms.

Real capital [not Bernanke capital] cannot form in a banking system as corrupt as ours.  It's really simple.

string's picture

Egg management fee bitchez.

unionbroker's picture

yield on  Royal Bank of Canada 3.349 yield on JPM .444

Robslob's picture

Never fear...iPads will now be exported "with radiation" already included in the new bundle!