The Federal Reserve explained the results of the second phase of the Comprehensive Capital Analysis and Assessment (CCAR), which has been conducted annually since 2010 to measure the strength of financial institutions in the United States.
Accordingly, the capital plans of all 34 banks of the US which were subject to the evaluation were accepted. These institutions, including financial institutions such as JP Morgan Chase, Bank of America, Citigroup, Goldman Sachs, HSBC and Morgan Stanley, have been able to use their extra capital to repurchase and distribute dividends by not appealing the Fed’s capital plans.
Besides these, although the Fed did not approve the capital plan, Virginia-based Capital One became the only bank that wanted the weaknesses of the planning process to be removed by the end of the year. One bank, Capital One Financial Corp, need to resubmit its scheme by year-end, though the Fed is still allowing it to go forward with its capital plan in the meantime. It is reported that Capital One, the largest 9th bank of the US, needs to strengthen its capital plan and re-offer it later this year.
American stocks gained momentum after the Federal Reserve‘s “green light” statement to the banks of the US. JP Morgan Chase and Bank of America led the gains in the stocks with an increase of more than 4 percent.
The US Federal Reserve (Fed) approved the capital plans of the largest banks in the country and showed “green light” to them in order to repurchase and distribute dividends with extra capital. After the announcement of the Federal Reserve of the US, the banks began to release details on how they plan to use their extra capital. Apart from Capital One, bank stocks rose in after-hours trading.