Report: Regulators Order Banks to Restrict Dividends, Buybacks

Wednesday, 10 Mar 2010 10:17 AM

 

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Shareholders may have to wait for months to retrieve capital after U.S. regulators told banks not to increase dividends or buy back shares amid political and economic uncertainty surrounding the financial industry, the Financial Times reported on Wednesday.

Executives at JPMorgan Chase & Co. and Goldman Sachs Group have talked in public and to regulators about the possibility of returning cash to investors after measures to retain capital in the wake of the global credit crisis, the FT reported.

However, those plans may be delayed if regulators oppose those moves, the newspaper said.

"Regulators are gun-shy at this stage, partly because they fear that giving the green light to healthier banks to return cash to investors would prompt demands from more troubled institutions to do the same," one senior Wall Street executive told the Financial Times.

Sources familiar with the situation said government agencies, including the New York Federal Reserve and the U.S. Treasury, told banks they would have to wait until the economic and legislative landscape became clearer before banks could follow through with plans to return funds to investors, the newspaper said.

A JPMorgan representative didn't immediately return a message seeking comment, and Goldman Sachs declined comment.

© 2014 Thomson/Reuters. All rights reserved.

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