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The Comprehensive Capital Analysis And Review And The New Contingency Of Bank Dividends, Robert F. Weber

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Historically, bank regulators have restricted bank dividends as part of a larger effort to preserve banks’ capital and make them more able to withstand losses. In today’s dynamic banking markets, the formulaic and rigid ways by which regulators have traditionally policed dividends have become anachronistic. Against this background, the Federal Reserve Board has attempted to update and reinvigorate dividend regulation through two regulatory reforms: (1) the Comprehensive Capital Analysis and Review (CCAR) program and (2) the Dodd-Frank Act stress testing program.

This Article explores the important practical and theoretical implications that result from these regulatory reforms. As a practical matter, …