- Bank Of England Lifts Dividend Restrictions
- U.S. Seeks Digital Trade Deal in Indo-Pacific
- E.U. Suspends Digital Tax Work
Bank Of England Lifts Dividend Restrictions
The Bank of England has announced that its recommendation for fiscal 2020 dividend payouts to be “at an appropriate level” is no longer necessary. The bank announced that its dividend limit recommendation had been lifted, effective today.
Among the banks subject to the dividend restriction in the U.K. were many large banks such as HSBC, Barclays, Standard Chartered.
Authorities still warn that defaults could increase as support gradually withdraws after restrictions are lifted.
European Central Bank Supervisory Board Member Margarita Delgado said that the bank could take action against excessive dividend payments.
Stating that the dividend ceiling application of the ECB, which is currently implemented as a pandemic measure, will most likely be lifted this year, Delgado noted that the ECB would encourage banks to adopt more moderate dividend policies.
“If they don’t do this, we can restrict banks’ dividends through higher capital or qualitative measures,” Delgado said.
The ECB has previously advised banks in the euro area not to pay dividends to their shareholders, limit these payments, and not buy back shares until September 30, 2021.
Wall Street banks began to announce successive dividend payments and share buyback programs after the Fed received a passing grade in stress tests.
U.S. Seeks Digital Trade Deal in Indo-Pacific
White House officials are considering different proposals for a digital trade agreement covering Indo-Pacific economies as the administration seeks ways to check China’s influence in the region. While the details of the potential deal are yet to be clarified, the deal is expected to cover Canada, Japan, Malaysia, Australia, New Zealand, and Singapore.
The agreement aims to set the standard for the digital economy. These include data usage and electronic customs regulations. Sources state that the Biden administration is closely interested in the steps that will strengthen economic ties with the Indo-Pacific Region.
The agreement may establish digital economy standards, such as regulations on data usage, trade facilitation, and electronic customs arrangements. It would also demonstrate that the Biden administration is interested in pursuing new trade opportunities after spending its first months focusing on enforcing existing agreements rather than moving forward with negotiations with the United Kingdom and Kenya.
Wendy Cutler, one of the former trade representatives of the USA, thinks that with the digital trade agreement, the USA will be included in the game again in the region.
However, it is stated that it will be difficult to sign a new agreement because of the USA’s unions and anti-free trade policies.
A White House official said Monday night no decisions had been reached but that the administration intended to deepen its relationship with the Indo-Pacific region in many areas, including digital trade. The Office of the U.S. Trade Representative declined to comment.
E.U. Suspends Digital Tax Work
The E.U. reported that work on its digital tax proposal had been halted to focus on the broader minimum global tax treaty.
European Union (E.U.) Commission Spokesperson Daniel Ferrie stated that an agreement was reached for a more stable, sustainable, and fair tax system at the G20 Summit held in Venice, Italy, and said:
“Successfully concluding this process will require a final effort from all parties, and the Commission is committed to focusing on that effort,” said a Commission spokesman.
“For this reason, we have decided to put on hold our work on a proposal for a digital levy as a new E.U. own resource during this period.”
Italian Economy and Finance Minister Daniele Franco announced on July 10 that as the G20 countries, they had reached a significant agreement on the international tax regulation of multinational companies.
Franco noted that he and his counterparts agreed that multinational companies should pay taxes where they operate and generate profits.
The Italian minister emphasized that they intend to put into effect the mechanisms they have agreed upon until the G20 Leaders’ Summit, which will be held at the end of October.
The E.U.’s announcement came after U.S. Treasury Secretary Janet Yellen arrived in Brussels for meetings with E.U. finance ministers and Commission officials. She is expected to discuss the tax deal and lobby against the proposed E.U. levy, which has been criticized as conflicting with the G-20 agreement.