Yesterday, noting that "extraordinary times require extraordinary measures," JPMorgan Chase & Co. announced that it was cutting its quarterly cash dividend from $0.38 per common share to $.05 per share "for the time being." This move will conserve $5 billion of common equity per year, providing an additional capital buffer if the recession drags on or is more severe than expected and potentially enabling the company to repay more quickly the $25 billion of capital it obtained under Treasury's Capital Purchase Program. CEO Jamie Dimon described this as a "strong precautionary measure to help ensure that our fortress balance sheet remains intact."

The company's announcement came on the same day Treasury provided some additional details about its recently announced Capital Assistance Program, under which larger institutions, like JPMorgan Chase, will undergo a stress test to determine what, if any, additional capital buffer may be required. The reduction in the common stock dividend is likely to reduce substantially the amount of capital (if any) that JPMorgan Chase would otherwise require.