WASHINGTON: The Federal Reserve on Thursday told Goldman Sachs and JPMorgan Chase to revise their capital plans within months to address weaknesses, as it signed off on the plans of 16 of 18 major banks.
The Fed meanwhile objected to the capital plans of two banks, BB&T and government-controlled Ally Financial, signaling that both need to strengthen their capital footing before paying any dividends.
Fourteen banks were given full okays to proceed with their plans for share buybacks and dividend payouts after the completion of a fresh round of stress tests and other assessments of soundness.
The Fed said it did not object to Goldman's and JPMorgan's programs, "but required the two institutions to submit new capital plans by the end of the third quarter to address weaknesses in their capital planning processes."
Ally and BB&T though will have to obtain prior written approval from the Fed to make any capital distributions.
"Strong capital levels help ensure that banking organizations have the ability to lend to households and businesses and to continue to meet their financial obligations, even in times of economic difficulty," the Fed said in a statement.
<Center><b><i>Copyright AFP (Agence France-Presse), 2013</b></i></center>
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