Aug 24 (Reuters) - The U.S. Federal Reserve said on Thursday it had lifted a restriction that barred Banco Santander SA's U.S. subsidiary from paying dividends back to the European parent.
In September 2014 the Fed took action against the Spanish lender's U.S. unit for breaching a restriction on paying dividends, which the banking regulator had imposed because the U.S. unit had earlier that year failed the Fed's financial stress test. The Fed subsequently forced Santander to repay the subsidiary the lost capital and banned the unit from making additional dividend payouts.
On Thursday, the Fed lifted the ban after Santander Holdings USA Inc. had successfully improved its capital position and risk management. (Reporting by Michelle Price; Editing by Chizu Nomiyama)