As the new coronavirus risks throwing the world into the most violent recession in recent history, authorities in the Nordic region are urging their banks to forego paying out dividends to shareholders.
At a time when tens of thousands of people are losing their jobs in the crisis, the banks' plans to issue generous dividends have not been well-received by authorities and some of the public -- who recall the banks' tendency to ask for taxpayer bailouts when things go south.
Among the most radical proposals has been the call by Norway's Financial Supervisory Authority on Wednesday for a ban on financial institutions paying out 2019 dividends "until further notice".
"A ban on dividend payments and other distributions will have a profound impact," the government agency said in a statement.
It added that "in view of the widespread crisis the country is in" that it believes "that such a measure is necessary to promote financial stability." Late Wednesday evening, the Norwegian government said it would not introduce a ban -- though it did not rule out the possibility "in the future" -- but urged all banks to postpone their dividends until the economic uncertainty had passed.
"I'm counting on financial institutions to have understood the severity of the economic situation and postpone their dividends to shareholders," Finance Minister Jan Tore Sanner said in a statement. In other Nordic countries, authorities have so far stopped short of suggesting regulation, instead urging the banks to reconsider their shareholder payouts.
The Finnish Financial Supervisory Authority said it would "monitor closely" that banks allocate relief measures for their intended purpose instead of paying dividends or bonuses.
"When people risk losing their jobs and companies risk keeling over, it is not the time for banks to pay dividends to their owners," Sweden's Minister for Financial Markets, Per Bolund told a press conference on Tuesday.
In Denmark, the government and the banking sector agreed on Monday to encourage banks to "reconsider dividend payments and share buy-backs already planned in view of the serious financial situation."