IDEAS home Printed from https://ideas.repec.org/a/ecb/ecbmbu/202100134.html
   My bibliography  Save this article

What makes banks adjust dividend payouts?

Author

Listed:
  • Belloni, Marco
  • Grodzicki, Maciej
  • Jarmuzek, Mariusz

Abstract

This contribution reviews historical drivers of bank dividend payouts in the euro area. Economic literature presents three main reasons for adjustments to dividend payouts: asymmetric information between shareholders and management, the presence of agency costs, and regulatory constraints. Using a panel data approach, the article finds evidence supporting all three hypotheses. Banks lower dividends after facing a decline in profits and capital, but counterfactual simulations show that this adjustment could be small. Regulatory restrictions may therefore be warranted in the event of large expected losses or heavy uncertainty. JEL Classification: G21, G35

Suggested Citation

  • Belloni, Marco & Grodzicki, Maciej & Jarmuzek, Mariusz, 2021. "What makes banks adjust dividend payouts?," Macroprudential Bulletin, European Central Bank, vol. 13.
    • Handle: RePEc:ecb:ecbmbu:2021:0013:4
    Note: 1486549
    as

    Download full text from publisher

    File URL: https://www.ecb.europa.eu//pub/financial-stability/macroprudential-bulletin/html/ecb.mpbu202106_4~63bf1035a7.en.html
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Salvatore Cardillo & Jacopo Raponi, 2023. "EU banks' dividend policies: main determinants and the role of capital ratios," Temi di discussione (Economic working papers) 1403, Bank of Italy, Economic Research and International Relations Area.

    More about this item

    Keywords

    bank dividends; financial regulation; payout policies;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G35 - Financial Economics - - Corporate Finance and Governance - - - Payout Policy

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ecb:ecbmbu:2021:0013:4. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Official Publications (email available below). General contact details of provider: https://edirc.repec.org/data/emieude.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.