DNB sees no reason to activate the countercyclical capital buffer (CCyB) for the Netherlands in December 2019. In September 2019 also, the CCyB had remained at 0%. One of the main considerations underlying this decision has been the subdued trend of credit growth and this situation has not fundamentally changed.
Besides the credit gap, DNB considers other variables such as trends in real estate prices and credit growth in certain sub-sectors. Since January 2016, DNB has been publishing the CCyB add-on on a quarterly basis, in accordance with the prevailing rules and regulations. Banks are required to apply the add-on to their exposures to Dutch counterparties. As a rule, CCyB decisions are internationally recognized, which means that non-domestic banks must apply the add-on set by DNB to their Dutch exposures. The countercyclical capital buffer is a variable add-on to the minimum capital requirements of up to 2.5% of risk-weighted assets, or even higher, should the circumstances dictate.
Related Link: Press Release
Keywords: Europe, Netherlands, Banking, CCyB, Credit Risk, Regulatory Capital, Basel III, DNB
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