1 Minute Read by Reuters Staff Reuters, FRANKFURT, July 1 – The European Central Bank intends to allow euro zone banks to restart dividend payouts to shareholders in October, barring a new economic downturn, but it still wants them to exercise caution, according to Andrea Enria, the ECB’s top supervisor. “In the absence of materially adverse events, we expect to repeal our recommendation by the end of the third quarter of 2021 and resume our usual supervisory process of examining dividends and share buybacks,” Enria told European Union legislators. “We expect distribution plans to remain sensible and commensurate with banks’ internal capital generation capacity, as well as the possible impact of a worsening in exposure quality, even in the face of unfavorable scenarios.” When the coronavirus outbreak began in March 2020, the ECB put a de facto ban on bank dividends, which was later changed to a payout cap. (Francesco Canepa contributed reporting, and Alison Williams edited the piece.)/n
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