#capital distribution

Home/Tag:#capital distribution
9 01, 2023


2023-01-09T16:42:26-05:00January 9th, 2023|2- Daily Briefing|

FRB Staff Criticizes GSIB Climate Action Plans

A new FRB staff paper assesses GSIB climate-action plans, finding them better but still wanting with regard to risk measurement, disclosure, and management as well as the alignment of financing activities with stated net-zero targets.  The paper largely depends on GSIB disclosures, likely not only leading authors to call for improvements given the well-known early stage of these releases, but also making uncertain its analysis of opaque areas such as internal policy alignment.  The study notes the lack of standardization in GSIB disclosures, efforts, and terminology but does not seem to address it in reaching its conclusions.

FRB-NY Staff Find Banks Target Repurchases to Constrain Capital Distribution

Reaching no conclusions about the wisdom of the Fed’s 2020 restrictions on bank capital distributions, a new blog post from FRB-NY staff finds that changes in repurchases account for almost all of the movement in bank shareholder payout since the pandemic and that the greater volatility of repurchases relative to dividends reflects long held trends.  This is because changes to repurchases are more discretionary than “highly visible” dividend changes.


26 09, 2022


2022-09-26T17:13:15-04:00September 26th, 2022|2- Daily Briefing|

EU Banks Placate Investors vs. Protecting Capital

As pressure mounts on bank capital requirements (see Client Report REFORM213), the IMF has released a study finding that European banks could not have reduced capital distributions during the first year of the pandemic but for supervisory restrictions.  This study is models-based and thus dependent on its assumptions.  It also does not cover U.S. banks and conditions in each region may differ, but the study concludes that EU banks did not discount future expectations of economic conditions or profitability.

FRB Dallas Paper Finds CBDCs Enhance Financial Inclusion

The Federal Reserve Bank of Dallas today published a working paper finding that both a low fixed-cost/rate and a high fixed-cost/rate CBDC facilitate inclusion without harming intermediation, although the lower fixed-cost/rate option results in greater inclusion by encouraging households now relying on cash to participate in the financial system.  It also found that a CBDC that increases inclusion does not necessarily decrease intermediation if the banking sector is not perfectly competitive, as its definition suggests is now the case.


Go to Top