• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Go to Positive Money Europe
  • Go to Positive Money US

Positive Money

Making money and banking work for society

  • About us
    • Our vision
    • Who we are
    • History & highlights
    • Contact us
    • Current vacancies
    • In the media
    • Funding & Annual Reports
  • What we do
    • Educate & empower
    • Research and Policy
    • Campaign & local groups
    • Influence decision makers
    • In the media
    • International Movement
    • Events
  • Resources
    • Videos
    • Publications
    • Local group resources
    • Lobby your MP
    • Organise an Event
    • Policy resources
    • Shop
  • Press
  • Blog
  • Donate
  • Positive Money Europe
  • Positive Money US

Bank of England drops dividend rules

by Anna Pick

London, 13 July 2021

The Bank of England has lifted restrictions on dividend payouts to shareholders at UK banks, after limits were imposed in March 2020 to encourage banks to preserve capital for lending to support the pandemic economy. The Financial Policy Committee’s biannual report states that “extraordinary guardrails on shareholder distributions are no longer necessary” and announced a return to the “standard approach to capital-setting and shareholder distributions”.

Sam Woods, Deputy Governor for Prudential Regulation and Chief Executive Officer of the Prudential Regulation Authority (PRA), told journalists at a press conference for the report this morning that “we’re taking [the guardrails] off, it’s back with bank boards, and we’ll expect them to take sensible decisions”.

Simon Youel, head of policy and advocacy at Positive Money, said:

“As ordinary people and businesses across the country have suffered the worst economic effects of Covid-19, banks have continued to rake in profits from government-backed loan schemes.

“British banks have proved time and time again that they can’t be trusted to make sensible decisions to support the public interest, and will instead prioritise short-term returns to shareholders over communities and the real economy. 

“With unemployment expected to rise and a high level of economic uncertainty, it is concerning that the Bank of England has decided to pander to bankers and shareholders instead of preserving capital for lending to support the recovery.”

Notes 

  1. Financial Stability Report, July 2021: https://www.bankofengland.co.uk/financial-stability-report/2021/july-2021 
  2. Financial Stability Report Press Conference, 13 July 2021: https://www.youtube.com/watch?v=PAqvXXelFJY&ab_channel=BankofEngland 
  3. PRA statement on capital distribution, 10/12/20: https://www.bankofengland.co.uk/prudential-regulation/publication/2020/pra-statement-on-capital-distribution-by-large-uk-banks 
  4. UK banks agree to scrap £8bn dividends amid recession fears, March 2020: https://www.theguardian.com/business/2020/mar/31/uk-banks-agree-to-scrap-dividends-and-bonuses-due-to-recession-fears  
  5. Positive Money is a research and campaign organisation working towards a money and banking system which supports a fair, democratic and sustainable economy. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of over 65,000 supporters. www.positivemoney.org.
  6. For more information from Positive Money or to arrange a briefing/interview with a spokesperson, please contact press@positivemoney.org.uk or Anna Pick on 07948802104.

Press releases bank lending, Bank of England, Coronavirus, dividends, financial regulation, financial.crisis, Payouts, press release, Shareholders

Anna Pick

Primary Sidebar

Get our latest campaign updates

Recent Posts

  • To tackle the cost of living we need to align banks with public purpose
  • Bank of England’s historic interest rate hike: Positive Money response
  • Why politicians are wrong to blame the ‘money supply’ for inflation
  • Glasto glory: hundreds join the call for affordable housing
  • The Future Of Finance: Report Launch

Footer

Follow us on social media

  • Facebook
  • Instagram
  • Twitter
  • YouTube

This work is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Unported License.


Privacy Policy, Terms & Conditions


Positive Money is a company limited by guarantee registered in England and Wales. Registered number 07253015.
Registered office: 104 Davina House, 137-149 Goswell Road, London EC1V 7ET.


Positive Money Europe