by Keith Zahra
The European Central Bank has told banks not to pay any dividend payments until at least January and urged them to be “extremely moderate” when setting staff bonuses during the coronavirus pandemic.
The recommendations from the central bank seek to help banks absorb losses and support lending throughout the crisis, which has left practically all eurozone countries in negative territory.
Andrea Enria, chair of the ECB’s supervisory board, said: “The build-up of strong capital and liquidity buffers since the last financial crisis has enabled banks during this crisis to continue lending to households and businesses, and thereby to help stabilise the real economy. Therefore, it is all the more important to encourage banks to use their capital and liquidity buffers now to continue focusing on this overarching task: lending, whilst of course maintaining sound underwriting standards.”