The Federal Reserve stress tested the economy last week by implementing two bank regulations:
- Limiting banks from stock buy backs.
- Limiting dividend increases.
These are modest precautions compared with halting dividends payments completely, and they begin in the third quarter.
The 34 biggest banks will also be required to re-submit an update of their capital plans later this year.
The regulations are ment to preserve high capital levels for the uncertain recovery ahead.
Banks aren’t the only thing that should be stress tested. You should also stress test your portfolio and financial plan, to ensure it can endure whatever gets thrown at it. Schedule a complimentary consultation with our financial advisors if you’re not sure where to start.
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