Featured Product

    CNB Relaxes Mortgage Limits, Reduces Capital Buffer

    July 08, 2020

    The CNB Board has confirmed the limit for the loan-to-value (LTV) indicator at 90% and abolished the limit for the debt-service-to-income (DSTI) indicator. The Board also reduced the countercyclical capital buffer rate for banks to 0.5%, with effect from July 01, 2020 (from the current level of 1%). The partial release of the countercyclical capital buffer will support the ability of banks to lend to non-financial corporations and households. In the event of a significant increase in credit losses of banks amid the pandemic, CNB stated that it is prepared to fully release the countercyclical capital buffer to support the ability of banks to lend smoothly to non-financial corporations and households. These decisions were based on the financial stability report for 2019-2020, which CNB published on July 08, 2020 and which identities risks to the financial stability of the Czech Republic for the near future.

    The financial stability report indicates that available unofficial data for the first months of 2020 suggest that measures against the COVID-19 pandemic have not yet had a significant effect on residential property prices. However, due to unfavorable developments in the real economy, there is potential for a decline in the coming quarters. The report highlights that situation in the domestic financial sector changed radically with the outbreak of the COVID-19 pandemic. The domestic financial sector, which continued to grow in most segments in 2019, entered the COVID-19 crisis in good shape. The main task of both micro-prudential and macro-prudential policies is now to ensure that the banking sector is sufficiently resilient to the effects of the COVID-19 crisis. The capital adequacy of the banking sector is robust for the time being. Most banks currently meet the aggregate capital requirement and have sufficient spare capacity to lend. In addition to the combined capital reserve, capital surplus and profit retained in accordance with the CNB recommendation also play a significant role in the capital cushion above the regulatory minimum. CNB asserts that it is ready to use all its supervisory and regulatory tools to maintain this situation.

     

    Related Links (in Czech) 

    Keywords: Europe, Czech Republic, Banking, Financial Stability Report, CCyB, RRE, COVID-19, DSTI, Financial Stability, Credit Risk, CRE, LTV, CNB

    Featured Experts
    Related Articles
    News

    BIS Paper Studies Impact of Fintech Lending on Small Businesses in US

    The Bank for International Settlements (BIS) published a paper that studies impact of fintech lending on credit access for small businesses in U.S.

    September 26, 2022 WebPage Regulatory News
    News

    UK Regulators Issue CRR Changes and Stress Test Scenarios for Banks

    The Prudential Regulation Authority (PRA) issued the policy statement PS8/22 to amend the Own Funds and Eligible Liabilities (CRR) Part of the PRA Rulebook and update the supervisory statement SS7/13 titled "Definition of capital (CRR firms).

    September 26, 2022 WebPage Regulatory News
    News

    EBA Launches EU-Wide Transparency Exercise in 2022

    The European Banking Authority (EBA) launched the EU-wide transparency exercise for 2022, with results of the exercise expected to be published at the beginning of December, along with the annual Risk Assessment Report.

    September 23, 2022 WebPage Regulatory News
    News

    SRB on CRR Quick-Fix to Policy for Multiple Point of Entry Banks

    The Single Resolution Board (SRB) welcomed the adoption of the review of the Capital Requirements Regulation, or CRR, also known as the "CRR quick-fix."

    September 22, 2022 WebPage Regulatory News
    News

    EC Rule Lists Advanced Economies for Market Risk Capital Calculations

    The European Commission (EC) recently adopted the Delegated Regulation 2022/1622, which sets out the regulatory technical standards to specify the countries that constitute advanced economies for the purpose of specifying risk-weights for the sensitivities to equity.

    September 21, 2022 WebPage Regulatory News
    News

    EBA Publishes Final Regulatory Standards on STS Securitizations

    The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.

    September 20, 2022 WebPage Regulatory News
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures

    The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8521