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By William Isaac
Published: February 9 2011 22:39 | Last updated: February 9 2011 22:39
Nineteen of the largest US banks received taxpayer capital in 2008 under the troubled asset relief programme and were prohibited from paying dividends. Sixteen of the banks have now repaid Tarp. Most are eager to resume paying dividends and have asked permission to do so from the Federal Reserve.
Some observers argue that it would be unwise for the Fed to authorise dividends before the banks put their financial houses on a stronger footing by raising more capital. They contend that to do otherwise would place the interests of bankers and their shareholders ahead of the needs of the economy.
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