Fed Plan Will Let Healthy Banks Boost Dividends

By: Associated Press
By: Associated Press

Washington, D.C. (AP) - The Federal Reserve is preparing to let
healthy banks boost dividends paid to investors.
Banks would need to show the Fed's bank examiners that they're
in good financial health and that they have adequate capital to
absorb potential losses -- even after paying the dividend. The Fed's
new guidelines were described by a government official with
knowledge of the matter who spoke on condition of anonymity because
the guidelines haven't been issued. They should be released within
several weeks, the official said.
The Fed oversees Wall Street's biggest banks, including
Citigroup, Bank of America, JPMorgan Chase & Co., and Wells Fargo.
During the financial crisis, banks cut their dividend payments.
By boosting their payments, banks may be able to attract new
investors.

(Copyright 2010 by The Associated Press. All Rights Reserved.)


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