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New York (CNN Business)America’s eight biggest biggest banks are slamming the brakes on their aggressive share buyback programs as they promise to preserve capital to get through the coronavirus crisis.

The financial institutions announced the buyback decision simultaneously Sunday evening just after the Federal Reserve took emergency actions aimed at staving off a deep economic recession.
The Financial Services Forum said its member institutions — Bank of America (BAC), Bank of New York Mellon (BK), Citigroup (C), Goldman Sachs (GS), JPMorgan Chase (JPM), Morgan Stanley, (MS) State Street (STT) and Wells Fargo (WFC) — are temporarily suspending share buybacks for the rest of the first quarter and the second quarter of 2020 in light of the coronavirus pandemic.

    “The COVID-19 pandemic is an unprecedented challenge for the world and the global economy and the largest US. banks have an unquestioned ability and commitment to supporting our customers, clients and the nation,” the group said in a statement Sunday. They added that each bank “retains the ability to reinstate its buyback program as soon as circumstances warrant.”
    US Bancorp, which is not part of the group, also announced Sunday it is temporarily suspending share buybacks because of the coronavirus.

    The decision reflects a realization that it would look bad for banks to reward shareholders with massive buybacks while simultaneously taking unpopular steps such as foreclosures, pulling credit lines, freezing hiring and laying off workers. And it could be aimed at easing pressure on big banks to cut their dividends.
    “There is tremendous political pressure on the banks to retain capital. This step should help,” Jaret Seiberg, analyst at Cowen Washington Research Group, wrote in a Sunday note to clients.

      However, Seiberg warned that pressure will build on big banks to cut their dividends if the economic crisis gets much worse: “This may become more of a political issue than a safety and soundness issue.”
      The coronavirus pandemic has crushed global markets. US stocks plunged into a bear market last week and the Dow is on track to plummet more than 2,000 points, or roughly 10%, Monday morning.
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