Banks told to curb dividends to prepare for euro shocks

UK banks are coming under renewed regulatory pressure to curb dividend and bonus payments to prepare for a disastrous euro break-up.

Banking supervisors are demanding lenders hold back more of their profits and build up capital in order to plan for a range of outcomes from the eurozone crisis, according to the Times. Andrew Bailey, director of banking at the FSA, said banks were being told to plan for "any disorderly consequences of the euro-area crisis". He said: "Good risk management means planning for unlikely but severe scenarios, and this means that we must not ignore the prospect of the disorderly departure of some countries from the eurozone ...