ESRB extends recommendation on restricting dividends

Written by Adam Cadle

18/12/2020

The European Systemic Risk Board (ESRB) has extended its recommendation on restricting dividends paid by financial institutions during the COVID-19 pandemic until 30 September 2021.

Reacting to the announcement, Dutch regulator De Nederlandsche Bank (DNB) said it supported the move stting that "financial instituttions must have sufficient capital to mitigate potentail systemic risk".

"As regards insurers, we will continue to assess their divident proposals critically, as we have been doing since July 2020. Insurers will in any case need to make a thorough, forward-looking analysis of how their capital policy relates to the COVID-19 crisis, the sustained low-interest rate environment, the supervisory framework and the ESRB recommendation. They are asked to exercise restraint and prudence."

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