The Federal Reserve has allowed banks to start issuing dividends and make stock buybacks again, because, after all, how can our financial system work without the masters of capitalism that we just bailed out (AGAIN!) having their damn stock options vest.
Financial stability is secondary to making sure that Wall Street CEOs get the obscene bonuses:
The Federal Reserve has given America’s most profitable banks the green light to resume share buybacks for the first quarter of next year, even though it found that the country’s biggest lenders could face pandemic-related loan losses of more than $600bn.
The US central bank’s decision to lift a six-month ban on buybacks followed months of public protests by profitable lenders, including Morgan Stanley and JPMorgan Chase, several of whom immediately signalled their intention to restart purchases.
Many analysts and investors expected the Fed to hold firm to its restrictions, as the US continues to suffer record coronavirus cases and deaths and lawmakers struggle to agree stimulus measures to boost the economy through another round of shutdowns.
Lael Brainard was the only one of the Fed’s five-person board of governors to vote against freeing banks up to return more to shareholders.
“Today’s action nearly doubles the amount of capital permitted to be paid out relative to last quarter,” she said in a statement. “Prudence would call for more modest payouts to preserve lending to households and borrowers during an exceptionally challenging winter.”
Just a small reminder: The Federal Reserve does not work for the American people, or even for the benefit of the financial system. It works for the bankers.
We are going to buy out these rat-f%$#s again sooner rather than later.