The U.S. Federal Reserve has made full use of its emergency arsenal to keep the financial system operating amid the coronavirus crisis. Its extraordinary efforts have helped keep credit flowing to households and businesses in desperate need.
Yet even as the Fed spares no effort, the largest U.S. banks are failing to take their own emergency measures. Most notably, they are continuing to pay dividends, depleting the loss-absorbing capital they need to weather the crisis. If they lack the will to act prudently, Congress should consider a better solution, and soon.