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ECB to Ask Banks to Weigh Russian Gas Embargo in Dividend Plans

Germany’s economy could contract by 12.7% should Russia fully turn off natural gas supplies.

Germany’s economy could contract by 12.7% should Russia fully turn off natural gas supplies.

Photographer: Alex Kraus/Bloomberg

The European Central Bank plans to ask the region’s lenders to factor in the economic hit of a potential cut off of Russian gas when considering payouts to shareholders.

“We will propose to ask banks to recalculate their capital trajectories under a more adverse scenario including also potentially a gas embargo or a recession,” said Andrea Enria, who leads the ECB’s supervisory board. The watchdog would “use this also for the purpose of vetting their distribution plans going ahead.”