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Nineteen big banks that underwent government stress tests in 2009 were to submit new capital...

Nineteen big banks that underwent government stress tests in 2009 were to submit new capital plans to the Fed by today to become eligible to raise their dividends. A potential consequence of today's court ruling: Banks with big foreclosure exposure may now be hesitant to boost dividends, which could negate a key point in the optimistic outlook for this year's stock market.
Comments (12)
  • 1980XLS
    , contributor
    Comments (3314) | Send Message
     
    Excess compensation, reduces capital levels and shareholder value.

     

    I thought everything was so great after paying back Tarp in Dec 2009 (for X-mas bonuses, Coincidence?) that capital levels were safe?
    And as such justified record compensation.

     

    The shareholder looting and fraud continues unabated with help from the Fed.
    7 Jan 2011, 06:30 PM Reply Like
  • mikeybronx
    , contributor
    Comments (347) | Send Message
     
    i was wondering if this pertained to regional banks
    7 Jan 2011, 06:56 PM Reply Like
  • bob adamson
    , contributor
    Comments (4555) | Send Message
     
    Short term stimulation of the stock market value of these banks should never be the prime consideration. Solvency and long term viability of the banks and therefore the banking system and credit system generally are the deeper issues for all concerned.
    7 Jan 2011, 07:37 PM Reply Like
  • RDI8001
    , contributor
    Comments (26) | Send Message
     
    The change in accounting rules worked magic for these banks. Mark to fantasy has allowed them to increase capital levels and show qtr profits. Has anything really changed? The amount of people not paying their mortgage (11.6%) has remained near record levels and actually ticked the last few months. The banks are holding back on foreclosure for a lot of reasons, but first of all is that it triggers a accounting recognition of a loss. So they let the mortgage holders stay in the house an extra qtr without paying, by doing this they save on the taking the hit to earnings.
    7 Jan 2011, 09:21 PM Reply Like
  • stmcca02
    , contributor
    Comments (195) | Send Message
     
    Dividend would be a reason to keep BAC rather than switching over to STD.
    7 Jan 2011, 09:45 PM Reply Like
  • No Free Cake
    , contributor
    Comments (1211) | Send Message
     
    Um, STD is paying about 8% dividend on a trailing 12 month basis (on US ADRs anyway). If the dividend is your key concern, I think STD is a clear winner over BAC. It's unlikely BAC will get anywhere near that.

     

    Of course, it's also possible STD will cut theirs longer term. However, you can read their annual statements and see their near-term plan is to hold steady.

     

    Don't really want to argue the future, just highlighting the lucrative dividend STD is now paying.
    8 Jan 2011, 01:30 AM Reply Like
  • Bill S. Friend
    , contributor
    Comments (711) | Send Message
     
    These findings should be made public if they are a publicly traded company, especially if they received tarp money. In fact banks should be made to come clean on exactly what liabilities remain on their books. The derivative market should be made transparent so that the risks to the market are apparent to everyone. In a free market society these issues should not be debated.
    7 Jan 2011, 10:06 PM Reply Like
  • Bill S. Friend
    , contributor
    Comments (711) | Send Message
     
    Three negative votes on market transparency? Who frequents this site Bernie Madoff?
    10 Jan 2011, 12:48 PM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    You probably got three thumbs down because it is clear that the type of "transparency" you want is not possible and as such has been discussed on this site many, many times. There are not enough accountants on the face of the earth to calculate "exactly" what the true values of the "assets" held on the books of the TBTF's is. ( Remember, on a banks books, loans are assets and deposits are liabilities, so what you really want to know is the value of the assets.)
    10 Jan 2011, 02:14 PM Reply Like
  • Bill S. Friend
    , contributor
    Comments (711) | Send Message
     
    Brooksley Borne where are you?!?
    13 Jan 2011, 10:31 PM Reply Like
  • Stone Fox Capital
    , contributor
    Comments (5788) | Send Message
     
    Seriously, that ruling was a joke and will have very little national ramifications.
    8 Jan 2011, 01:09 AM Reply Like
  • 7footMoose
    , contributor
    Comments (2266) | Send Message
     
    I can only hope that you are correct but I'm not so sure about the ramifications being small. I think that there will be a serious legal assault on mortgage securitizations and that the end result will be greater difficulty and higher cost for borrowers to obtain residential mortgages, less availability if you will. The result on the already wounded residential home market could be very negative.
    Just my view.
    8 Jan 2011, 08:05 AM Reply Like
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