With Covid and Brexit ongoing, the economic emergency has only just begun
Vaccines are here, and now bank dividends are back. The Bank of England said on Thursday that distributions to shareholders, which were frozen in March, can resume because banks are “resilient to a wide range of economic outcomes”, including ugly ones. The move feels premature.
The Prudential Regulation Authority at the Bank will have reached its decision with hard analysis, of course. It’s also true that the City viewed banks’ capital buffers as strong (at least by historical standards) at the start of the Covid crisis, and that provisions for pandemic-related losses currently look conservative.
