By RTT News, March 14, 2013, 04:51:00 PM EDT
(RTTNews.com) - The U.S. Federal Reserve said Thursday that it has approved the capital plans of 14 financial institutions in the Comprehensive Capital Analysis and Review.
Two other institutions received conditional approval, while the Fed objected to the plans of two firms.
The Federal Reserve did not object to the capital plans for American Express Co. ( AXP ); Bank of America Corp. ( BAC ); The Bank of New York Mellon Corp. ( BK ); Capital One Financial Corp. ( COF ); Citigroup, Inc. ( C ); Fifth Third Bancorp (FITB); KeyCorp (KEY); Morgan Stanley (MS); The PNC Financial Services Group, Inc. (PNC); Regions Financial Corp. (RF); State Street Corp. (STT); SunTrust Banks, Inc. (STI); U.S. Bancorp (USB); and Wells Fargo & Co. ( WFC ).
The Fed did not object to the capital plans for The Goldman Sachs Group, Inc. ( GS ), and JP Morgan Chase & Co. ( JPM ), but required the two institutions to submit new capital plans by the end of the third quarter to address weaknesses in their capital planning processes.
The Fed, however, objected to the capital plans of Ally Financial, Inc., and BB&T Corp. ( BBT ).
In the Comprehensive Capital Analysis and Review, the Fed evaluates the capital planning processes and capital adequacy of the largest bank holding companies, including the firms' proposed capital actions such as dividend payments and share buybacks and issuances.
When considering an institution's capital plan, the Fed considers both qualitative and quantitative factors. Those include a firm's capital ratios under severe economic and financial market stress, the strength of the firm's capital planning process, and the institution's plans to meet new Basel 3 capital requirements as they would be implemented in the United States. After the Federal Reserve objects to a capital plan, the institution may only make capital distributions with prior written approval from the Federal Reserve.
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