Washington, May 22 : International Monetary Fund (IMF) Managing Director Kristalina Georgieva has urged the halting of bank dividends and buybacks in light of the COVID-19 induced economic contraction, noting that such actions could help reinforce bank buffers. In an opinion piece published on the Financial Times on Thursday, the IMF chief said even though the resilience of the financial system has been significantly strengthened after the 2008 financial crisis, as the world braces for a deep recession this year, "this resilience will be tested", reports Xinhua news agency. "Having in place strong capital and liquidity positions to support fresh credit will be essential. One of the steps needed to reinforce bank buffers is retaining earnings from ongoing operations. These are not insignificant," Georgieva said. According to IMF calculation, the 30 global systemically important banks distributed about 250 billion US dollars in dividends and share buybacks last year. "This year they should retain earnings to build capital in the system," she said. Noting that the interests of bank shareholders are aligned with those of bank supervisors and customers, Georgieva said all stakeholders will also ultimately benefit if banks preserve capital instead of paying out to shareholders during the pandemic. The global fiscal support to fight COVID-19 has totalled about $9 trillion, $1 trillion more than the estimates over a month ago, according to an IMF blog published Wednesday. The breakdown looks like this: direct budget support is currently estimated at $4.4 trillion globally, and additional public sector loans and equity injections, guarantees, and other quasi-fiscal operations amount to another $4.6 trillion, the blog said. Central banks, meanwhile, have also provided extraordinary liquidity support to a wide range of markets. "The public sector is doing what it can to help prevent another banking crisis from happening again. Shareholders have both an interest and an obligation to do the same," Georgieva said. The IMF chief pointed out that in some countries, banks have voluntarily decided to collectively suspend shareholder payouts and buybacks, and in others, authorities have had to push. "The need to preserve capital is already being recognized and needs to be so more widely," she said. "Collective decisions are vital." /IANS