In class, we have been talking a lot about the weakness of banking industry so I think this article will bring us a promising new about banks' health. "The Federal Reserve served notice that the financial industry's health
continues to improve, potentially clearing the way for large U.S. banks
to funnel tens of billions of dollars to investors in increased dividend
payments and share buybacks." Do you think this is a good sign that the economy is recovering and this is enough to bring investors' confidence back?
Paying out dividends is always a good sign/relief for investors in a company. But, it does not necessarily mean the company is making a substantial profit. I don't think it is enough, at least for me, to bring confidence back into this industry. After the collapse in 2008, I think its going to take awhile before people really start to trust the big banks of America. "Too Big To Fail"... right?
ReplyDeleteAccording to Koo, companies will start investing again once they pay off some large debts regardless of what monetary policy is enacted. This is a good sign and another good step we are taking though. As long as we are headed in the right direction the economy will eventually return.
ReplyDeleteI can only hope we do not come across another recession after reading this article. Reading that an economic downturn would lead to a loss of $462 billion and an increase in unemployment up to 12% is a scary thought. I am very skeptical about the decisions that banks are making right now. I hope the banks that are paying out these large dividends can really afford them. Also, I hope that people who receive the dividends will use this money to continue to grow our economy.
ReplyDeleteI agree with Carter, I am also unsure if the banks could really afford such large dividends. Most of these banks are already in the list of "too big to fail" so every single decisions they make are questionable as they know they are going to be bailed out if they run into any financial disaster.
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