Executive Board member Fabio Panetta told Portuguese newspaper Expresso that he’s open to allowing some banks to resume paying dividends. Nevertheless, “if they don’t distribute dividends this year, they can distribute more next year and in the meantime they will be in a better position to face a situation of serious crisis”.

“If I had to choose between the two approaches, I would opt to be more prudent, but that could imply a cost for banks,” he said. “I consider that a reasonable solution, as economic conditions improve, would be a case-by-case approach by banking supervision authorities.”

In the account of October 28-29 ECB meeting, it’s noted that “risks surrounding the growth outlook to be clearly tilted to the downside”. The assessment “largely reflected the recent resurgence in COVID-19 infections, the associated intensification of containment measures and the high uncertainty surrounding the timeline of the pandemic and the implications for economic and financial conditions.”

“Given the sharper slowdown in growth momentum and the weakening of underlying inflation dynamics compared with what had previously been expected, as well as the deterioration in the balance of risks, it would be warranted to recalibrate the monetary policy instruments in December.”

However, it’s noted that more than half of the PEPP envelope was still available in case of “renewed market turbulence”. “By the time of the December meeting, updated staff projections would be available and a clearer picture of the dynamics of the pandemic and prospects of a vaccine might have emerged, together with more information on the fiscal policy responses in the euro area.”

Full accounts here.

ECB Executive Board member Yves Mersch said in an interview that the second coronavirus lockdown in European has been “much less growth-damaging and much more targeted “. Still there is an “increase in fragmentation”, with divergence between services and manufacturing sectors. Some countries are more exposed to the pandemic consequences.

Overall, it’s “difficult to maintain positive growth going into the fourth quarter”. Germany might achieve it but others not. But it’s “premature to conclude that will last into next year with consecutive quarters of negative growth.

On ECB’s policies, Mersch said recalibration could be rectification, “simply an extension “on the time axis” or “of the volume or the intensity”. A second approach is “more targeted, or more focused, or on the contrary consider now untested instruments, a theoretical possibility in an all encompassing discussion.”

Full interview here.