ECB recommends banks to freeze dividends, buy back shares until January 2021
|The European Central Bank (ECB) appealed to the European banks to hold off on dividends and not to buy back shares until January 2021, Reuters reported on Tuesday.
Key points
“ECB extends recommendation not to pay dividends until January 2021 and clarifies timeline to restore buffers.”
“ECB asks banks not to pay dividends and not to buy back shares until January 2021.”
“Expects banks to exercise extreme moderation on variable remuneration to conserve capital in crisis.”
“Banks to be extremely moderate with regard to variable remuneration.”
“It clarified that it will give enough time for banks to replenish capital and liquidity buffers in order not to act pro-cyclically.”
“ECB will review whether stance remains necessary in Q4, taking into account economic environment, financial system and capital planning.”
“Continues to encourage banks to use their capital and liquidity buffers for lending purposes and loss absorption.”
“It will not require banks to start replenishing their capital buffers before the peak in capital depletion is reached.”
“Exact timeline will be decided following the 2021 EU-wide stress test.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.