The Governing Council of BNB has set the level of the countercyclical capital buffer (CCyB) applicable to credit risk exposures in the Republic of Bulgaria to 1.5%, for the first quarter of 2021. The level of the countercyclical buffer applicable to credit risk exposures in the Republic of Bulgaria remains 0.5% until the end of the first quarter of 2020 and 1% from April to December 2020. However, the decision on the level applicable in the second quarter of 2021 is due in March 2020.
Lending activity in the housing and consumer loans segment in Bulgaria remains high. The continued retention of low interest rates could lead to a significant increase in debt, which would make the banking sector's asset quality, profitability, and capital position more sensitive in the event of any adverse changes in the economic environment. Given that ability of borrowers to service debt can weaken in the eventual future decline in economic activity, this increase in the CCyB level is intended to enhance resilience of the banking sector to such developments.
Related Links (in Bulgarian)
Keywords: Europe, Bulgaria, Banking, CCyB, Credit Risk, Basel III, Regulatory Capital, BNB
Previous ArticleBI, OJK, and LPS Establish Integrated Reporting Portal for Banks
The Hong Kong Monetary Authority (HKMA) revised the Supervisory Policy Manual module CG-5 that sets out guidelines on a sound remuneration system for authorized institutions.
The European Banking Authority (EBA) published the final guidelines on the monitoring of the threshold and other procedural aspects on the establishment of intermediate parent undertakings in European Union (EU), as laid down in the Capital Requirements Directive (CRD).
In a recent Market Notice, the Bank of England (BoE) confirmed that green gilts will have equivalent eligibility to existing gilts in its market operations.
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
The European Banking Authority (EBA) proposed regulatory technical standards that set out criteria for identifying shadow banking entities for the purpose of reporting large exposures.
The Board of the International Organization of Securities Commissions (IOSCO) proposed a set of recommendations on the environmental, social, and governance (ESG) ratings and data providers.
The European Securities and Markets Authority (ESMA) published recommendations from the Working Group on Euro Risk-Free Rates (RFR) on the switch to risk-free rates in the interdealer market.
The European Central Bank (ECB) published a paper as well as an article in the July Macroprudential Bulletin, both of which offer insights on the assessment of the impact of Basel III finalization package on the euro area.
The International Swaps and Derivatives Association (ISDA) published a paper that explores the impact of the Fundamental Review of the Trading Book (FRTB) on the trading of carbon certificates.
The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.