BNB notified EBA, ECB, and ESRB about its decision on the identification of other systemically important institutions (O-SIIs), the activation of the O-SII buffers, and the level of systemic risk buffers. Additionally, Polish Financial Supervision Authority (Komisja Nadzoru Finansowego or KNF) notified EBA, ECB, and ESRB about its decision on the identification of other systemically important institutions (O-SII) and the activation of O-SII buffers.
BNB announced the list of identified O-SII institutions, their respective overall scores, the respective buffer rates, and the timeline of the phase-in of the buffer rates. The O-SII institutions include DSK Bank EAD, UniCredit Bulbank AD, First Investment Bank AD, United Bulgarian Bank AD, Eurobank Bulgaria AD, Raiffeisenbank (Bulgaria) EAD, Central Cooperative Bank AD, and Bulgarian Development Bank AD. The phase-in period for the O-SII buffer rates is from 2017 to 2020. The list of O-SIIs was identified based on the quantitative approach in accordance with the EBA guidelines. Changes in the buffer level of certain institutions are due to changes in the overall score of these institutions in 2019, from 2018. As an integral part of the combined buffer requirements, the O-SII buffers will further increase capacity of the systemically important institutions to absorb losses. The O-SII buffer rates are proportional to the higher risk that these institutions pose to the financial system due to their size, complexity, and importance for the economy.
Additionally, BNB notified that it introduced the systemic risk buffer at a rate of 3% for risk exposures located in Bulgaria in 2014. In the 2019 review of the systemic risk buffer, BNB confirmed the current level of the buffer. The buffer is applicable to all banks in the country on both individual and consolidated levels. This means that banks identified as O-SIIs shall comply with the sum of the two buffer requirements. SRB requirement will be reviewed every two years. Over the years, it has been assessed that the systemic risk buffer does not represent additional regulatory burden for banks. KNF identified O-SIIs and set the O-SII buffer for these institutions in October 2016, with the activation of the measures from December 31, 2016. The measure has now been reviewed and will continue to apply until next years’ annual review.
- Notification of BNB on O-SIIs (PDF)
- Notification of BNB on Systemic Risk Buffers (PDF)
- Notification of KNF on O-SIIs (PDF)
Keywords: Europe, EU, Bulgaria, Poland, Banking, Systemic Risk Buffer, Macro-Prudential Measures, Systemic Risk, Proportionality, BNB, EC, EBA, ECB, ESRB
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
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