ECB: Asking banks to refrain from or limit dividends until September 2021

Eren Sengezer FXStreet

In a press release published on Tuesday, the European Central Bank called on banks to refrain from or limit dividends until 30 September 2021.

Additional takeaways

"Dividends to remain below 15% of cumulated 2019-20 profits and not higher than 20 basis points of CET1 ratio."

"ECB reiterates supervisory expectation that banks exercise extreme moderation on variable remuneration."

"Banks should continue to use their capital and liquidity buffers for lending purposes and loss absorption."

"The recommendation is related to the current exceptional circumstances and will remain valid until the end of September 2021."

Market reaction

The EUR/USD pair showed no immediate reaction to this statement and was last seen gaining 0.2% on a daily basis at 1.2165.

Author

Eren Sengezer

FXStreet

As an economist at heart, Eren Sengezer specializes in the assessment of the short-term and long-term impacts of macroeconomic data, central bank policies and political developments on financial assets.

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