Just after the Federal Reserve announced it's cutting interest rates to zero, the eight-member group that makes up the Financial Services Forum put out a statement that it will suspend stock buybacks through the second quarter of 2020.

The banks that are part of the forum are Bank of America (BAC 0.92%), Bank of New York Mellon (BK 0.51%), Citigroup (C 0.05%), Goldman Sachs (GS 0.15%), JPMorgan Chase (JPM 0.50%), Morgan Stanley (MS 0.81%), State Street (STT 1.60%), and Wells Fargo (WFC 0.92%).

Person handing over money to another.

Image source: Getty Images.

Why are they making this move?

The statement follows guidance from the Federal Reserve for banks to make their money available to individuals who may need it at this critical time. 

The banks said, "The decision on buybacks is consistent with our collective objective to use our significant capital and liquidity to provide maximum support to individuals, small businesses, and the broader economy through lending and other important services."

In general, public companies buy back stock, along with issuing dividends, as a way of increasing shareholder value.

The Federal Reserve also removed its minimum cash reserves conditions for banks to keep as much cash liquid as possible for loans and lines of credit.

Banks have been getting slammed

Bank stocks have fallen along with the broader market. Some of the banks that have been hit the hardest are Citigroup, which is down around 46% as of this morning's trading, and Wells Fargo, which is down about 50%.

Federal Reserve Chairman Jerome Powell praised the forum's move as they work together to help Americans survive financially.