Sam Woods

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Some of Britain's biggest banks have agreed to scrap, dividend payments, and you hold on to The Cash that may be required, while the coronavirus Crisis .

The Bank of England welcomes the decision to suspend the payments to the shareholders and urged The Banks to pay bonuses to senior staff, either.

to pay The Banks , which include NatWest, Santander and Barclays, were overdue, billion to shareholders.

But in the last few days, you have to keep coming Under Pressure on The Money .

"A sensible step'

The Deputy Governor of The Bank of England, Sam Woods , wrote some of the banking bosses, and asked the suspension of the payment of dividends. He asked you to confirm your decision by Tuesday evening.

In a statement, the Prudential Regulation Authority, the part of The Bank of England, said: "Although the decisions of today, as a result, the shareholders receive dividends, they are a sensible precaution, given the unique role that banks play in supporting the General economy through a period of economic disorder. "

Between them, Lloyds, Royal Bank of Scotland, Barclays, HSBC and Standard Chartered were expected to pay a total of £15. 6bn to shareholders in accordance with the analysis of the investment firm Aj Bell .

But they are now kept, which means and not to the payment of money to the shareholders should contribute at least up to The End of the year, said The Bank of England, "The Banks support the economy by 2020".

Many economists predict that the British, economies, together with other major economies, will be a recession this year, with the overthrow of the output set.

in the Last week, fell to the lowest reading ever. That led economists at Capital Economics are forecasting a 15% decline in the British economy in The Second quarter of the year.

'Extraordinary' move

Stephen Jones, chief executive, Uk Finance , the industry Association for banks and financial companies, told the Today programme that The Banks were dividends in view of the scrapping, before The Bank of England commissioned.

"It is very clever, The Banks retain the funds, rather than distribute it in the current environment," He Said .

losses-increase in existing loans, He Said , which means lenders need to protect a larger buffer, deposits and keep The Bank running.

"It is important that The Banks have so much fire power, as they support the economy," he added.

But The Bank said it had not expected that The Cash is required, noting that The Banks had More Than enough money in reserve to deal with a global recession and a shock to the financial Markets .

shareholders of Barclays had were due to Share £1 billion in dividends on Friday

banks were criticised during the financial Crisis 12 years ago, if you dividends for months before needing to the largest rescue operations in history.

Since then, The Banks are forced to hold more capital, in order to prevent The Need to be spent for more public money, although not all banks have fully recovered. The government still owns 62% of the Royal Bank of Scotland, for example.

Barclays investors", will be The First to be affected by the stopping of the dividends. Its shareholders were due to Share a payment of More Than £1 billion on Friday.

the said Barclays chairman Nigel Higgins, the suspension of the payment was a "difficult decision".

"The Bank has a strong capital base, but we think it is right and wise for the many companies and people we support to take these steps now, and ensure that Barclays is well placed to continue to do what we can to help through this Crisis ," he added.

the British consumer is protected up to £85,000 Per bank under the Financial Services Compensation Scheme. In other words, if a bank collapses, savers of money to get these accounts up to £85,000 compensation Paid .

Common accounts have a level of protection of £170,000.

This is a significant step of the commercial banks.

they decided not to pay shareholders billions of pounds worth of dividends after receiving a firmly worded letter from The Bank of England, which wants The Banks to have The Money to support lending in the economy. And with some of the payments made in just a few days, the impact is felt almost immediately by some shareholders.

The Bank of England's watchdog the Prudential Regulation Authority, also clearly stated that they expect to pay a of the British business banks, cash bonuses, although that is yet to be agreed.

to get The logic here is to cash where it is needed, but the regulator has also make The Point that this Crisis is a moment of possible salvation for the industry. The Banks have the ability to distance themselves from the financial Crisis they created to be the economic Savior of the coronavirus Crisis . But that depends on you, the preservation of liquidity, Bank overdrafts and lines of funding to to viable again once the pandemic.

For example, the Chancellor freelance worker scheme will lead to considerable cash amounts deposited in The Bank accounts, but not Until June and depends a lot on banks, the employee financially afloat until then.

The cancellation of dividends, mountains, also the pressure on the other sectors to take into account the received money for furloughing Workers - or even more direct government support for scrapping their dividends.

"these are difficult decisions, not least in terms of the immediate impact on the shareholders," said Barclays chairman Nigel Higgins.

"The Bank has a strong capital base, but we think it is right and wise for the many companies and people we support to take these steps now, and ensure that Barclays is well placed to continue to do what we can to help them through this Crisis . "

uk banking, uk economy, coronavirus pandemic, banking, bank of england

Source of news: bbc.com