CNB Decides to Maintain Countercyclical Capital Buffer Rate at 0.50%
CNB Bank Board decided to keep the countercyclical capital buffer (CCyB) rate for exposures located in the Czech Republic unchanged at 0.50%. CNB published Provision (I/2021) on setting the CCyB rate, specifying that the rate has been set pursuant to Article 92(3) of the Capital Requirements Regulation (575/2013). The Provision also mentions that banks and credit unions shall apply the CCyB rate for calculating the combined buffer requirement as of April 01, 2022. The Provision came into effect on March 05, 2021.
CNB had set the CCyB rate at a non-zero level for the first time at the end of 2015. The latest change in the rate occurred on June 18, 2020, when the Bank Board decided to lower the rate to 0.50%, with effect from July 01, 2020. Given the relatively slow build-up of new risks in the banking sector’s balance sheet and given the continuing limited materialization of risks taken on in the past, CNB Bank Board expects a gradual rise in the CCyB rate to the level covering the usual level of risks. By contrast, should the economic situation worsen, CNB remains ready to release the buffer immediately and fully, to support banks’ ability to provide credit to non-financial corporations and households without interruption. The decisive signal for such a step would be cyclical risks that were accepted earlier materializing via credit losses and an increase in risk- weights for internal ratings-based loan portfolios.
Related Links
Effective Date: March 05, 2021
Keywords: Europe, Czech Republic, Banking, CCyB, Credit Risk, Macro-Prudential Policy, Systemic Risk, Regulatory Capital, Basel, CRR, CNB
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
DNB Publishes Version 2.2 of AnaCredit Reporting DocumentationRelated Articles
HKMA Finalizes Policy Modules on Group-Wide Approach and Remuneration
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.
EBA Guide to Monitor Threshold for Intermediate Parent Undertakings
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).
PRA Finalizes Approach to Supervision of International Banks
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.
FCA Issues PS21/9 on Implementation of Investment Firms Regime
The Financial Conduct Authority (FCA) published the policy statement PS21/9 on implementation of the Investment Firms Prudential Regime.
EBA Proposes Regulatory Standards to Identify Shadow Banking Entities
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.
IOSCO Proposes Recommendations on ESG Ratings and Data Providers
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.
ESMA Group Issues Recommendations on RFR Switch in Interdealer Market
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.
ECB Study Assesses Impact of Basel III Finalization Package
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.
ISDA Finds FRTB Results in Higher Capital Charges for Carbon Trading
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.
PRA Updates Remuneration Policy Statement Templates and Tables
The Prudential Regulation Authority (PRA) published the remuneration policy self-assessment templates and tables on strengthening accountability.
