At top US banks, stress test capital hit driven by dividends
Shareholder giveaways make up bulk of post-stress capital losses at JP Morgan, Morgan Stanley, Bank of America
Most US banks projected their core solvency ratios would erode under the Federal Reserve’s latest stress test. But for some, the largest driver of capital loss was not the effects of the Fed scenario itself, but their own plans to pay dividends to shareholders.
Each bank that participated in the latest Dodd-Frank Act stress tests (DFAST) had to estimate what their Common Equity Tier 1 (CET1)
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