The European Central Bank has demanded that eurozone banks not pay dividends and not buy back shares until at least October, and that their profits be used to support the economy in the face of the consequences of a virus outbreak Corona.
In order to boost the banks ’ability to absorb losses and support lending ... they should not pay dividends for the fiscal years 2019 and 2020 until at least October 1, 2020, according to Reuters.
Banks should also refrain from share buybacks aimed at rewarding shareholders.
Most of the banks have acknowledged the difficulty of paying distributions for the current year in light of imposing public closings on large parts of the euro area and preparing the economy for an unprecedented deflation.
But some big banks, such as Spain's Santander, Intesa San Paolo and UniCredit Italians, are still sticking to plans to pay part of last year's earnings.
The European Central Bank estimates that the move could provide banks with liquidity of thirty billion euros.
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