(Bloomberg) --

Swiss financial markets regulator Finma increased pressure on the nation’s banks to reconsider their dividend proposals, saying that any payments to shareholders will be deducted from capital relief they’ve recently been granted.

“The capital freed up through this relief in the leverage ratio calculation is not to be distributed,” Finma said in a circular on Tuesday. “For banks whose shareholders approved after 25 March 2020 dividends or other similar distributions relating to 2019, or who plan to seek such shareholder approval, the capital relief will be reduced by the amount of the said distributions.”

Finma is following the lead of the European Central Bank, which on Friday urged banks to postpone dividend payments until at least October to conserve capital because of the economic damage caused by the coronavirus outbreak. While Credit Suisse Group AG has suspended its share buyback, both it and UBS Group AG have pledged to pay their dividend.

The Swiss National Bank, in common with the ECB, has announced a raft of measures intended to cushion the effect of the crisis on banks’ balance sheets. Switzerland is adjusting regulatory standards to free up 26 billion francs ($26.5 billion) worth of capital including the elimination of a countercyclical capital buffer designed to insulate banks from mortgage risks.

Money parked at the central bank can for a time be excluded from the calculation of commercial banks’ leverage ratio, according to Finma. That change would free up about 20 billion francs, Finma has said.

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