With a heavy focus on the granular details of compliance, bankers and regulators might miss the big picture — not unlike New York City’s approach to fighting crime in the 1990s.
Higher dividends and more aggressive repurchase programs are bound to attract more investors, which could boost stock prices and prompt more dealmaking, analysts said.
The largest banks announced plans to distribute capital back to shareholders after the Fed gave passing grades to everyone following this year’s CCAR stress tests.
All 34 banks passed the Fed’s CCAR stress test, fueling industry calls to dial back the intensity of the stress tests. But many of the changes have already been internalized by banks.
The research firm is set to release a report Tuesday that it says previews the results of the Fed’s 2017 Comprehensive Capital Analysis and Review stress test results for 16 superregional banks.
Though regulatory rigor has improved post-crisis, it would be hubris for the Fed to believe it has found a magic formula that will predict with accuracy how any of the big banks will truly perform in the next downturn.
