Fed approves capital plans of Goldman and JPMorgan

Mon Dec 2, 2013 5:14pm EST
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By Emily Stephenson

WASHINGTON (Reuters) - The Federal Reserve on Monday said it approved new capital plans by Goldman Sachs and JPMorgan Chase, after initially ordering the banks to fix flaws in their capital planning processes.

The plans are part of the stress-testing regime meant to determine how the biggest U.S. banks would fare in a financial meltdown.

In March, the Fed said Goldman and JPMorgan could move forward with plans to buy back shares and pay dividends.

But regulators said the stress tests, or Comprehensive Capital Analysis and Review (CCAR), showed both banks had flawed processes for determining capital payouts to shareholders.

Regulators told the two banks to fix the problems and submit new plans by the end of the third quarter.

"We are pleased that the Fed determined that our CCAR process improvements met their expectations," JPMorgan's chief executive, Jamie Dimon, said in a statement on Monday.

The bank, which has come under intense scrutiny by regulators, this year committed some 5,000 people to shoring up an assortment of business controls and processes, including monitoring risk and guarding against money laundering.

Goldman in a statement said the Fed had not objected to its new plan. A spokesman did not immediately have further comment.   Continued...

The sun rises to the east of the U.S. Federal Reserve building in Washington, July 31, 2013. REUTERS/Jonathan Ernst