Major US banks aim to keep shareholders happy amid crisis
NEW YORK American taxpayers bailed out the major banks during the 2008 global financial crisis that they helped create. But more than a decade later, amid an unprecedented economic shock, those firms now say they are strong enough to continue paying dividends to shareholders.<br /> <br /> Despite mounting political opposition, especially among Democrats who are calling on banks to use their cash stockpiles to help US businesses survive the coronavirus pandemic, the financial institutions see the payments as a signal to investors that they are in good health.<br /> <br /> Large US banks have until Monday to inform the Federal Reserve how they intend to allocate their cash in the coming months as required by the post-crisis banking regulations known as CCAR.<br /> <br /> "Our dividend is sound. We plan on continuing to pay it," Michael Corbat, chief executive of Citigroup, the fourth-largest US bank in terms of assets, said on CNBC on Wednesday.<br /> <br /> With share prices plunging worldwide, the feeling is gaining traction among Wall Street bankers, who worry about the implications for their already depressed stocks.<br /> In his annual letter to shareholders Monday, JPMorgan Chase CEO Jamie Dimon said the board would only consider suspending its dividend - and then "out of extreme prudence" - in the event of a severe recession, with the economy contracting by as much as 35 per cent and unemployment surging to 14 per cent at the end of the year.<br /> <br /> The current economic outlook is already disastrous: the global economy has plunged almost overnight into a deep recession.
