ECB Recommendation on Dividend Distribution Policies for Credit Institutions
A Recommendation of the European Central Bank (ECB) of 17 January 2020 on dividend distribution policies has been published in the Official Journal today. This non-binding act was adopted by the ECB’s Governing Council in carrying out its tasks of prudential supervision of credit institutions, in accordance with Council Regulation 1024/2013.
The Recommendation departs from the consideration that ‘a conservative distribution policy is part of an adequate risk management and sound banking system’. In essence, it advises credit institutions to establish dividend policies using conservative and prudent assumptions in order, after any distribution, to satisfy the applicable capital requirements and the outcomes of the supervisory revie