But now the fed seems to slowly be taking steps to limit bank's actions.
https://www.nytimes.com/2020/06/25/busi ... imits.htmlWASHINGTON — The Federal Reserve on Thursday temporarily restricted shareholder payouts by the nation’s biggest banks, barring them from buying back their own stocks or increasing dividend payments in the third quarter as regulators try to ensure banks remain strong enough to keep lending through the pandemic-induced downturn.
The decision to limit payouts is an admission by the Fed that large financial institutions, while far better off than they were in the financial crisis, remain vulnerable to an economic downturn unlike any other in modern history. With virus cases across the United States still surging and business activity subdued, it remains unclear when and how robustly the economy will recover.
Some of the Fed’s own loss projections for banks, in fact, suggest that the eventual hit to loans in a bad scenario could be far worse than in the aftermath of 2008.