Buybacks inflate the value of the shares the investors hold
According to LearnBonds, 8 American banks revealed they were freezing share buybacks to put more cash into the US economy, beset by the coronavirus.
This way, Bank of America, Citigroup, Bank of New York Mellon, Goldman Sachs, Morgan Stanley, JPMorgan Chase, Wells Fargo, and State Street will cancel their share buyback programs at least until the Q2 2020.
The decision was announced only hours after the US Federal Reserve decided to cut its benchmark interest rate by an extra 1%, reducing them to 0%, the data unveiled.
Besides, the Financial Services Forum stated the lenders remain strong and well-capitalized. They collectively have risen their capital by over 40% over the past 10 years to $914 billion.