ESRB issues renewed recommendation on dividend restrictions
The European Systemic Risk Board (ESRB), the EU’s macroprudential overseer, has issued a recommendation to all member states that financial companies (such as banks, investment firms and insurance companies) shall refrain from or limit dividend payments. This recommendation is in line with the decisions on restricting distributions published by the European Banking Authority (EBA) and the European Central Bank’s (ECB) Single Supervisory Mechanism (SSM) on 15 December. Its purpose is that the financial system shall have sufficient capital to counteract risks to stability in the financial