Recommendation of the European Systemic Risk Board amending Recommendation ESRB/2020/7 on restriction of distributions during the COVID-19 pandemic

The document extends the restriction on distributions for financial institutions under the supervisory remit of relevant authorities until 30 September 2021, prohibiting dividend distributions, ordinary share buy-backs, and obligations to pay variable remuneration to material risk takers that reduce own funds, unless the reduction does not exceed a conservative threshold set by competent authorities. Central counterparties are removed from the scope of these restrictions following stress tests confirming their operational resilience. Competent authorities must calibrate the conservative threshold by considering capital trajectory, ensuring overall distribution levels remain significantly lower than pre-crisis years, and accounting for sector-specificities, with implementation reports due by 15 October 2021.

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This document amends: Recommendation on restriction of distributions during the COVID-19 pandemic

Source: European Systemic Risk Board — original document · Summary generated with machine assistance and reviewed before publication; the authoritative text is the regulator's original document. How RegAlert works