Fed’s Kashkari Suggests That U.S. Banks Should Raise Capital

(Bloomberg) -- Federal Reserve Bank of Minneapolis President Neel Kashkari responded on Wednesday to a summary of earnings comments this week from JPMorgan, Citigroup and Wells Fargo by tweeting a link to an opinion piece from April in which he argued that U.S. banks needed to raise $200 billion in capital to survive the economic downturn.

“Raising that amount from private investors today, as a strong, preventive measure, would ensure that large banks can support the economy over a broad range of virus scenarios,” he wrote in April, adding that banks should also stop paying dividends. “If the crisis turns out less serious than we fear, banks can return the capital through buybacks and dividends once the crisis passes.”

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