Faculty News
Professor Viral Acharya argues that the Fed should require banks to increase their cash reserves against potential losses by halting dividend payments
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Excerpt from The Washington Post -- "So policymakers should not wait to act, said Acharya, an economics professor at New York University’s Stern School of Business. For now, interest rate increases are a non-starter given the economy’s profound weakness. But the Fed should require banks to beef up their reserves against potential losses by halting dividend payments, he said. 'You have to ensure that banks have enough capital on the balance sheet that you can afford to let these firms go bankrupt,' Acharya said. “It’s not about what’s happening right now. It’s whether you have created resilience in the financial sector to deal with what is a plausibly weak outlook.'”
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