Fed's Kashkari says major U.S. banks should raise $200 bln in capital- FT

Big banks in the United States should raise $200 billion in the capital right now amid the ongoing coronavirus outbreak, Minneapolis Federal Reserve Bank President Neel Kashkari wrote in an op-ed for the Financial Times newspaper.

"In 2008, U.S. taxpayers injected about $200 billion of capital to strengthen banks", Kashkari wrote on Thursday. "Raising that amount from private investors today, as a strong, preventive measure, would ensure that large banks can support the economy over a broad range of virus scenarios", he added.

U.S. banks must discontinue dividend payments and raise capital, Kashkari wrote, adding they can return the capital through buybacks and dividends if the health crisis turns out to be smaller than feared. Kashkari said on Sunday that the U.S. economic recovery from the disruptions caused by the outbreak will likely be a "long, hard road" and that he was looking toward an 18-month strategy to address the effects of the pandemic.