Bank Dividends Face European Regulatory Pressure Until 2021
- Risk board says virus hit has become clearer in recent months
- Central bank has previously said no dividends until October
Photographer: Alex Kraus/Bloomberg
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European Union financial authorities urged banks to hold off paying dividends, awarding senior bonuses and buying back shares until at least January to help banks conserve capital to weather the pandemic.
The European Systemic Risk Board said the toll of the crisis has only become clear in the last two months, and suggested restrictions should last beyond the European Central Bank’s request that banks limit payouts until October. Even more restraint could be needed “if additional data indicate a slower release from containment policies and potentially a deeper economic slump,” the ESRB said on June 8.