ECB tells banks to factor in recession in shareholder payouts

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A symphony of light consisting of bars, lines and circles in blue and yellow, the colours of the European Union, illuminates the south facade of the European Central Bank (ECB) headquarters in Frankfurt, Germany, December 30, 2021. REUTERS/Wolfgang Rattay

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FRANKFURT, July 7 (Reuters) - Euro zone banks should factor in the risk of a recession when calculating how much capital they can pay out to shareholders, the European Central Bank's top supervisor Andrea Enria said on Thursday.

"We are asking individual banks to review their capital trajectories to include sufficiently conservative and updated adverse macroeconomic scenarios, notably including recessionary assumptions," Enria said.

"These capital trajectories should be used by banks when announcing distribution plans, after a dialogue with their supervisory teams."

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Reporting By Francesco Canepa; Editing by Toby Chopra

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