By Emily Stephenson
WASHINGTON Dec 2 The U.S. 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
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.
Regulators began testing the biggest banks after the
2007-2009 crisis. As part of the tests, banks must submit
capital distribution plans for Fed approval.
Regulators can block banks from carrying out those plans if
they think buying shares or paying dividends would pose risks to
the banks' stability.
The Fed rejected last year's plans by Ally Financial and
BB&T. Both banks have since submitted new plans that
Goldman and JPMorgan were allowed to carry out their capital
distribution plans, but the Fed reprimanded the banks based on
"qualitative" concerns, not questions about their capital
Regulators did not disclose at the time what weaknesses they
spotted in the banks' capital planning.