ECB Warns Banks Against Dividends

The European Central Bank asked the eurozone’s banks not to pay dividends to the rest of the year and asked them to accumulate their funds to strengthen defenses against the expected wave of closures. Meanwhile, at the same time, the European Central Bank has given more time to banks to recognize loan losses, saying that it will not tighten supervisory standards for liquidity and capital until the end of 2022. The central bank is determined not to turn the expected economic crisis into a financial crisis after the recent wave of banking problems in the Euroarea.

Eurozone shares increased 0.6% with the largest increase seen in Spain, and Spanish banks may need capital relief more than most other banks due to the damage to the tourism sector after major increases in Covid 19 cases.