by BoatSurfer600
FRANKFURT (Oct 7): The European Central Bank (ECB) is ratcheting up pressure on some banks to keep 2022 bonuses in check amid fears about the darkening economic outlook, according to people with knowledge of the matter.
The euro area’s top banking supervisor has told individual lenders recently that it expects restraint in variable pay and dividends as it is concerned the energy crunch could result in a wave of defaults, the people said, asking not to be identified as the discussions are private. The warnings have gained in urgency, with the ECB now seeing a sharper slowdown in Europe next year as a likely scenario, the people said.
The rising pressure comes as several euro area banks including UniCredit SpA, Commerzbank AG, and Deutsche Bank AG recently gave bullish guidance, even with surging inflation and rising interest rates weighing on the economic outlook. The lenders have also said it is unlikely they will need to make massive credit provisions even with the additional challenge of soaring energy prices in Europe.
Source: www.theedgemarkets.com/article/ecb-steps-pressure-banks-exercise-bonus-caution-%E2%80%94-sources