ECB Steps Up Pressure on Banks to Exercise Bonus Caution
- Top supervisor Enria has warned banks may underestimate risk
- ECB in the past has intervened to curb banks’ bonus pools
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The European Central Bank is ratcheting up pressure on some banks to keep 2022 bonuses in check amid fears about the darkening economic outlook, according to people with knowledge of the matter.
The euro area’s top banking supervisor has told individual lenders recently that it expects restraint in variable pay and dividends as it’s concerned the energy crunch could result in a wave of defaults, the people said, asking not to be identified as the discussions are private. The warnings have gained in urgency, with the ECB now seeing a sharper slowdown in Europe next year as a likely scenario, the people said.