No Free Cake

The Return of the Financial Dividends

Keep in mind that some banks kept a minimum dividend because some investors - certain institutions and trusts - are prohibited by their charter from owning non-dividend paying stocks.

This is partly behind the reason the government backed off their requirement to have banks stop paying dividends altogether when creating the bailout regulations.

A company that cut its dividend to .01 or .05, to me, is the same as elimination and I'd have to review each situation on its own to see if I'd be interested after the dividend was restored.

The 'Stress Test' Challenge: Transparency and Intellectual Integrity

Isn't the stress test basically a new regulatory system for banks - although implemented without the normal comment and review periods?

The concept of this test implies that the current valuation methods for regulatory capital don't work. If they did, there wouldn't be any doubt as to which banks were sound.

In the longer run, the stress test will either completely replace the current capital regulations or be a partial overlay. It will only add clarity if it becomes permanent and fairly rigid - the administration has so far not ascribed it either of these attributes