events, we conducted a suite of additional analyses to assess the sensitivity of this year ’ s results. 5 this comprehensive analysis included consideration of banks ’ vulnerabilities under three additional downside scenarios that were very severe even given how gloomy the picture looked this spring. the staff also incorporated a number of conservative assumptions about the balance sheet changes that we saw at the end of the first quarter. 2 / 4 bis central bankers'speeches this analysis found that the banking system would experience substantial losses under those highly adverse conditions but remain well capitalized in the aggregate. however, individual bank outcomes across the three scenarios varied significantly. the variation in those outcomes highlighted the considerable uncertainty in the economic outlook at the time and how that would translate to banking conditions in coming quarters. accordingly, we required banks to resubmit their capital plans and took several actions to preserve capital in the interim. for the third quarter, the board required large banks to suspend all stock repurchases, capped their dividends, and placed a second limit based on individual banks earnings. the limitation of share repurchases, which accounted for 70 percent of all capital distributions at large banks in recent years, by itself led to a meaningful preservation of capital among large banks. the dividend restrictions guarded against capital depletion in the event that some banks experienced unexpectedly large losses, while still allowing firms that could support them to pay out dividends. late last month, the board extended the distribution limitations onto the fourth quarter amid the continued uncertainty. the federal reserve is currently conducting another round of stress tests, using two new severe downside scenarios published last month, and will release bank - specific results from both scenarios before the end of the year. 6 taken together, these actions will preserve capital in the system during this highly uncertain time. as i noted, i also hope that the process we followed to arrive at these decisions will affirm that our actions, even in a crisis, will be dictated by the most comprehensive analysis we can do in a timely manner and will be as tailored to individual institutions ’ condition as is feasible given the circumstances. while banks so far have been resilient to the shock from the covid event, the same cannot be said for important parts of the system of nonbank financial intermediation ( nfbi ). starting in march, federal reserve facilities were needed to contain pressures in some prime money market funds, as well as, to a lesser extent, in certain long - term mutual funds that invest

to find more convenient and secure ways to make purchases, pay bills, settle debts, and post credits, especially over the internet. “ on - line ” banking involves electronic access to information over the internet about accounts and loans - - including current balances and transactions history - - as well as providing the ability to carry out payment related transactions - - including transfers among accounts, receiving and paying bills, applying for bank credit cards, and reordering checks. some so - called virtual banks have been set up to service customers exclusively through electronic channels, but an increasing number of traditional “ bricks and mortar ” banks see the internet as another delivery channel that improves convenience for some of their customers. similarly, the emergence of e - money reflects the attempt to develop new payment methods as a more efficient alternative to existing electronic payment means. the future of money : the spread of e - money many innovations to existing payment systems have been successful, but the question remains as to how e - money, a fundamentally new payment system, has fared. as mentioned earlier, most types of e - money take one of two forms : stored value cards and network e - money. initially, many believed that these innovations would allow more retail and smaller - value transactions to be made electronically, paralleling the move to electronic funds transfer for large - value payments. of course, substantial investments were needed to provide the infrastructure for using these types of payment devices and to ensure that enough consumers and merchants would use them to make the investments worthwhile. in the end, despite optimistic predictions, this first generation of e - money products was not widely adopted in the united states. in general, stored - value cards have been successful in closed payment systems, where e - money was the primary payment instrument accepted, and have failed in open payment systems, where competing instruments were readily available. examples of closed system successes include mass transit systems, college campuses, and military bases. two well - publicized open system e - money experiments that fizzled ( one at the 1996 olympics in atlanta and the other on the upper west side of manhattan in 1997 and 1998 ) accepted e - money at only limited locations and suffered operational difficulties. limited locations discouraged consumer use, while operational difficulties discouraged merchant use. both consumers and retailers were able to substitute other payment instruments, which resulted ultimately in lack of either customer or retailer support for the product. possibly as a result of these experiences, new e - money plans target captive markets, including corporate expense accounts, teenagers with allowances