Why is the ECB asking EU banks to hold off on buybacks? In the wake of the Covid-19 pandemic, the ECB requested EU banks not to pay dividends as well as refraining from buying back their own shares until the end of 2020. And that even if they had already set cash aside for future loan losses.
Banks however are lobbying for a resumption to shareholder payouts. Presumably because their stocks have been hit hard by the cancellation  of dividends (among other things).
Buybacks (allowed since 1982) can be  a hot political topic, scrutiny is imposed around them. They can affect a companies EPS and therefore executive rewards.
Why is the ECB asking EU banks to hold off on buybacks?  And why is it so important for banks to resume shareholder payouts ? What, in effect, is impact the payout (E.g. impact different if payout is 10% of banks profit VS 50% ) ?
The reason for the ECB to limit dividend payments is to preserve bank capital, to ensure safety and soundness of the banking system at a time of stress.  Remember that when banks pay dividends , the capital base is reduced.   If that happens at the same time that banks have to make provisions against bad loans , taxpayers could be at risk from bank bailouts.