Fed Caps Bank Dividends, Bans Buybacks Through September (1)

The Federal Reserve told the biggest U.S. banks they can’t increase dividends or resume buybacks through at least the third quarter as uncertainty over the course of a global pandemic weighs on lenders.

The industry performed well in annual stress tests, according to a statement Thursday from the central bank, but a separate review of the effects of the coronavirus on the economy and financial system uncovered potential risks that left the fate of their dividends in question.

The Fed “is taking action to assess banks’ conditions more intensively and to require the largest banks to adopt prudent measures ...