Cap Markets

Some criticized the Fed’s decision to temporarily lift capital restrictions for megabanks, but the move will help ease the crisis.

The Fed’s recent action capping dividend payments might prove inadequate once the coronavirus crisis really hits banks’ capital.

The country's largest bank said second-quarter profit fell 51% to $4.69 billion, a smaller drop than forecast, as record trading revenue helped counter the biggest loan-loss provision in its history.

The Federal Reserve's extraordinary effort to keep credit flowing to companies during the COVID-19 pandemic is also shunting money to banks' bottom lines.

As PPP enters forgiveness phase, some banks see outsourcing as best move; after the Fed’s stress tests, Wells Fargo to cut dividend while other big banks boost capital buffer; Supreme Court strikes down CFPB leadership structure; and more from this week’s most-read stories.

The class A notes, secured by legacy trust-preferreds and subordinated debt of institutions, carry an investment-grade A1 rating from Moody's. That rating is slightly lower than a prior Hildene CDO, due to elevated pandemic risk to bank profitability.

While elevated loan-loss provisions are expected to eat into all banks’ earnings, midsize banks could suffer more than their big-bank rivals because they have fewer revenue drivers. Meanwhile, investors will be watching closely for any signs of dividend cuts stemming from the Federal Reserve’s caps on payouts.

The Main Street Lending Program is off to a slow start, while the PPP is extended five weeks to distribute the remaining $130 billion in loans; the European regulator is softening its stance to allow more deals.

The credit union regulator has not yet announced an agenda, but the meeting could potentially include mattes related to field of membership and risk-based net worth.

Six of the eight regional banks that announced their stress capital buffers on Tuesday said they will need just a 2.5% cushion to weather an economic downturn. All eight said they’ll keep their dividends steady.