The European Central Bank’s (ECB) supervision board chair Andrea Enria said that the central bank would lift its cap on dividends and share buybacks for Eurozone banks in Q3 this year. The move comes a week after the Fed’s stress-tests allowed it to ease dividend and buyback restrictions placed during the peak of the pandemic. The European Banking Authority will announce the results of its latest stress-tests on July 30. Enria said that banks had “robust capital positions and their profitability recovered in the second half of 2020 and the first quarter of 2021” and thereby proved resilience. Similarly, ECB President Chirstine Lagarde said that the European Systemic Risk Board was also likely to recommend lifting caps on bank distributions.
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