UK moves early to dispel fears about bank capital buffers

By Tyler Davies
22 Oct 2020

Markets rejoiced this week after the Bank of England proposed policy changes that will make it harder for UK lenders to run into automatic restrictions on their additional tier one coupons and equity dividends. The move was seen as a way of addressing concern about ‘buffer usability’, which has come to the fore during the Covid-19 pandemic.

The Bank of England floated plans to update the framework for the maximum distributable amount (MDA) on Tuesday, as part of the UK’s transposition of the latest EU Capital Requirements Directive (CRD V). 

MDA rules are important because they dictate whether or not a bank is able to ...

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