2020-06-22 00:00:00, Inc., WisdomTree ETF Blog
Content Categorization
/Finance
/News/Business News
/Business & Industrial
Word Count:
718
Words/Sentence:
24
Reading Time:
7.18 min
Reading Quality:
Advanced
Readability:
16th or higher
Federal Reserve (Fed) Chair Jerome Powell has opposed a blanket ban, saying the banks are "highly capitalized, with more high-quality capital than before the financial crisis."
For European bank regulators, the answer is yes.
Most major European banks have suspended share buybacks and dividends since being directed by regulators to do so in March.
This coordinated decision provided cover for the weakest banks to slash payouts.
The WisdomTree U.S. LargeCap Index is a value-tilted index with an over-weight of about 6% in Financials relative to the S&P 500.
The Index weights the 500 largest profitable U.S. companies by earnings.
Because of the cyclicality of earnings for banks, and the currently depressed expectations for their near-term earnings, the large banks all have lower weights in the market cap-weighted benchmark than in the earnings-weighted index.
1Andrew Ackerman and Nick Timiraos, "Fed Unlikely to Order Big U.S. Banks to Suspend Dividends," The Wall Street Journal, 4/3/20.
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