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Everyone’s abuzz with the unexpected early release of the results of the Federal Reserve’s stress test on the 19 biggest US banks this afternoon after market close.Many believe the Fed’s decision to release the stress test results was because JP Morgan had announced paying out a $0.30 dividend for the quarter and plans to begin a $15 billion share buyback program around 3 pm today—sending a signal that they had passed their Fed stress test with flying colours.
Some have speculated it was a total power play on part of JPMorgan CEO Jamie Dimon.
But that may not be the case.
A source familiar with JP Morgan said the bank received its test results around noon from the Fed without any mention of any restrictions on when the information could be publicized. In addition, the Fed saw and approved the press release from JPMorgan announcing the repurchases and dividends before it was publicized, the source said.
The source added that since the information on the share buybacks and dividends for JP Morgan was market-moving information, it was a best practice to make it available to the public as soon as possible.
After the JP Morgan release went out and the Fed updated its stress test results release time, other banks who underwent the stress test followed suit with press releases concerning their dividend and capital plans—which also gave indication to whether they had passed the test or not. Banks like USBancorp and BB&T also announced dividends.
Fed officials did not return a request for comment to Business Insider at the time of publishing.
Bloomberg TV earlier reported that Fed officials said the uncoordinated release of the information from JP Morgan was a mix up.