Watchdog urges bosses to conserve cash to offset losses
The City watchdog has warned funds, stockbrokers and wealth managers that it will closely scrutinise any dividends and bonuses they pay, writes Michael O’dwyer, as it called on firms to conserve cash.
The Financial Conduct Authority (FCA) said firms have a responsibility to manage their finances carefully during the pandemic because of their importance to the wider economy. Bosses must take steps to conserve capital and prepare plans to deal with a possible liquidity squeeze as the economic decline continues, it said.
It called on boards to be prudent when deciding on payments to shareholders.
“We would not expect firms to distribute capital that could credibly be required to absorb losses over the coming period,” the FCA said.