Banks should rein in bonuses to boost their capacity to help businesses and households hit by the coronavirus crisis, the European Commission said on Tuesday.
Ciara Lee reports
EU sets out 'quick fixes' to boost bank lending during pandemic
Rein in bonuses and help businesses and households survive the crisis - that's the advice for banks from the European Commission.
It came as Vice President Valdis Dombrovskis set out a package of temporary "quick fixes" for banks on Tuesday (April 28).
It's to offer capital relief that would support extra lending potentially worth up to $490 billion to companies struggling.
(SOUNDBITE) (English) EUROPEAN COMMISSION VICE PRESIDENT VALDIS DOMBROVSKIS, SAYING: "During the last crisis, we had to prop up banks.
This time, we are helping banks to prop up households and companies.
They need to keep the liquidity taps turned on.
This is the goal of the package we have adopted today to facilitate the bank lending to support the real economy." The Commission added that the easing of capital and accounting rules will be temporary, and the package needs to be approved by EU states and the European Parliament by June at the latest to have the full effect.
The EU executive also backed statements from regulators that banks should refrain from paying dividends and limit bonuses as a way to express solidarity with those affected by the crisis.
Lenders like UniCredit and Deutsche Bank have begun reporting rising provisions for bad loans as a deep recession looms. On Tuesday HSBC said it expected 3 billion dollars in charges to cover credit gone sour just in the past quarter.