The Bank Board of the Czech National Bank (CNB) decided to increase the countercyclical capital buffer (CCyB) rate for exposures located in the Czech Republic by 50 basis points to 1.50%, from October 01, 2022. This decision to increase the rate for the second time this year indicates the end of the acute phase of pandemic, the record volumes of housing loans accompanied by rapid developments in the real estate market, and the high levels of previously accumulated risks in the balance sheets of banks. The countercyclical capital buffer was introduced as an important instrument of macro-prudential policy within the European Union in 2014, with the institutions mandated to create this reserve during a period of excessive credit growth.
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Keywords: Europe, Czech Republic, Banking, Regulatory Capital, Systemic Risk, CCyB, Macro-Prudential Policy, Basel, CRR, CNB
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