Fed orders Bank of America to revise dividend, buyback plans
WASHINGTON - The Federal Reserve has ordered Bank of America to revise its plans for increasing dividends or buying back stock, saying there are gaps in its risk planning.
The Fed announced the decision Wednesday as part of its "stress tests" - an annual check-up of the nation's biggest financial institutions. This year, 31 banks were tested to determine if they have large enough capital buffers to keep lending through another financial crisis and severe economic downturn.
The central bank is also barring U.S. divisions of two European banks from paying any dividends, saying their planning for financial risks is inadequate. Those divisions belong to Germany's Deutsche Bank and Spain's Santander.
BofA's planning shortfalls don't undermine its positive stress-test results.
The remaining 28 banks can raise dividends or buy back shares.