March 2021: New BIS Bulletin – Covid-19 bank dividend payout restrictions: effects and trade-offs
by Bryan Hardy Key takeaways In the context of the Covid crisis, authorities adopted dividend payout restrictions to enhance bank resilience and support stronger growth in bank lending. Restrictions may reduce short-term equity returns for bank shareholders, especially in the case of banks with a low price-to-book ratio. In line with these predictions, bank equity prices fell[…]