Fed May Curb Banks’ Dividends Due to Virus Crisis, Quarles Says

The Federal Reserve could curtail Wall Street banks’ ability to pay dividends by cranking up the amount of capital they need to maintain due to the coronavirus crisis, Governor Randal Quarles said Tuesday.

Quarles, the Fed’s vice chairman for supervision, said the central bank is adding a current-events analysis to its annual stress-testing process that could influence lenders’ ability to distribute capital. The impact of the economic meltdown caused by the global pandemic could shift the stress capital buffer that determines capital demands at the banks and how much they can return to shareholders, he told Senate Banking Committee members ...