Federal Reserve to set bank capital levels via pre-pandemic stress test model

Those results will help the Fed decide whether banks can pay out extra funds to investors via dividends or share repurchases

The U.S. Federal Reserve will still rely on a stress test built before the onset of the coronavirus pandemic to set big bank capital requirements, and rely on extra pandemic-specific analysis to inform whether banks can pay out funds to investors, a top official said Friday.

Continue Reading Below

FED'S POWELL WARNS 'SIGNIFICANT' NUMBER OF AMERICANS COULD REMAIN UNEMPLOYED AFTER VIRUS RECOVERY

Fed Vice Chair Randal Quarles said in a speech that the Fed is testing banks against three possible economic trajectories of varying severity to see how they perform, citing “unprecedented uncertainty” about the pandemic’s long-term economic impact.

FED WARNS ECONOMIC DAMAGE FROM CORONAVIRUS PANDEMIC COULD BE 'QUITE PERSISTENT'

Those results will help the Fed decide whether banks can pay out extra funds to investors via dividends or share repurchases.

GET FOX BUSINESS ON THE GO BY CLICKING HERE