What to do with all that cash?

March 10, 2010 | By Jim Kim

There's been a lot of talk about top banks deploying cash in shareholder-friendly ways via stock buybacks and dividends. Much of this may be wishful thinking, especially in light of the news from the Financial Times that regulators have asked banks to hold cash until the legislative and economic uncertainty passes, which doesn't appear to be anytime soon.

That's bad news for healthy banks, such as Goldman Sachs (NYSE: GS), which suspended a buyback program in 2008, and JPMorgan (NYSE: JPM), which has slashed its dividend by nearly 90 cents. Regulators may soften their stance if the economy shows more improvement, but that's an uncertain proposition. Some banks are mulling other uses for their cash. At Bank of New York (NYSE: BK), CEO Bob Kelly (Robert Kelly news) says he favors expanding the business first. But raising the dividend is something that is under discussion. Might JPMorgan or Goldman Sachs opt to use the cash for a deal?

For more:
- here's the FT article