ESRB updated the table showing the countercyclical capital buffer (CCyB) rates applicable in the countries in the Eurosystem. Also updated were the CCyB rates that have been announced, but not yet implemented, by the designated authorities.
As part of the information accompanying the announcement, designated authorities must notify ESRB about each quarterly setting of CCyB rates. On August 21, 2018, the Central Bank of Cyprus (CBC) set the CCyB rate for the period October 01, 2018 to December 31, 2018 at 0% of the total risk exposure amount of each licensed credit institution and each investment firm that:
- Provides the investment services of dealing on own account or underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis
- Has not been exempted by the CBC due to its small or medium size
The countercyclical capital buffer (CCyB) is part of a set of macro-prudential instruments, designed to help counter pro-cyclicality in the financial system. Capital should be accumulated when cyclical systemic risk is judged to be increasing, creating buffers that increase the resilience of the banking sector during periods of stress when losses materialize. This will help maintain the supply of credit and dampen the downswing of the financial cycle. A CCyB can also help dampen excessive credit growth during the upswing of the financial cycle.
- Applicable CCyB Rates
- Announced CCyB Rates
- CCyB Caps (XLSX)
- ESRB Recommendation on Setting CCyB (PDF)
Keywords: Europe, EU, Banking, CCyB, Capital Buffer, Macro-prudential Instrument, Systemic Risk, ESRB
Sam leads the quantitative research team within the CreditEdge™ research group. In this role, he develops novel risk and forecasting solutions for financial institutions while providing thought leadership on related trends in global financial markets.
Previous ArticleAgustín Carstens of BIS on Role of Proportionality in Tackling Risks
ECB published a decision allowing the euro area banks under its direct supervision to exclude certain central bank exposures from the leverage ratio.
ESAs launched a survey seeking feedback on the presentational aspects of product templates under the Sustainable Finance Disclosure Regulation (SFDR or Regulation 2019/2088).
ECB published input of the European System of Central Banks (ESCB) into the EBA feasibility report on reducing the reporting burden for banks in EU.
ECB finalized the guide on assessment methodology for the internal model method for calculating exposure to counterparty credit risk (CCR) and the advanced method for own funds requirements for credit valuation adjustment (A-CVA) risk.
EBA published an Opinion addressed to EC to raise awareness about the opportunity to clarify certain issues related to the definition of credit institution in the upcoming review of the Capital Requirements Directive and Regulation (CRD and CRR).
APRA is consulting on updates to ARS 210.0, the reporting standard that sets out requirements for provision of information on liquidity and funding of an authorized deposit-taking institution.
FED released hypothetical scenarios for a second round of stress tests for banks.
FED is proposing to temporarily revise the capital assessments and stress testing reports (FR Y-14A/Q/M) to implement the changes necessary to conduct stressed analysis in connection with the re-submission of capital plans, using data as of June 30, 2020.
FED adopted a proposal to extend for three years, with revision, the information collection under the market risk capital rule (FR 4201; OMB No. 7100-0314).
EBA published a voluntary online survey seeking input from credit institutions on their practices and future plans for Pillar 3 disclosures on the environmental, social, and governance (ESG) risks.