BCB Maintains Countercyclical Capital Buffer for Banks at 0%
At its meeting in November 2020, the Financial Stability Committee of BCB decided to keep the countercyclical capital buffer for Brazil (CCyB or ACCPBrasil) at 0%. The Committee considers it appropriate to maintain the buffer at 0% throughout 2021. The Committee will meet again on March 02, 2021. In addition, BCB is consulting on a set of rules that seek to harmonize the prudential treatment applicable to payment transactions, whether carried out by a payment institution or by a financial institution. The proposal provides for the gradual implementation of the new rules, with full adoption in January 2025. The consultation is open until January 26, 2021.
According to the proposal, the capital requirement for payment activities will have the same methodology, regardless of whether it is determined by a Type 1, Type 2, or Type 3 conglomerate. This methodology consists of applying a percentage to the average volumes of payment transactions carried out in the last 12 months. The only exception is Type 1 institutions in Segment 1. For the Type 2 conglomerate, the proposal also redefines the concept of regulatory capital by replacing the current definition of adjusted shareholders' equity by profit and loss accounts with the new concept of Payment Institution Reference Equity (PRIP). The rules for calculating the PRIP will ensure greater quality for the capital of a payment institution, to allow the most effective fulfillment of its essential function, which is to absorb unexpected losses. Additionally, the Type 2 conglomerate will now have a capital requirement for exposures arising from activities subject to credit or operational risk. Such requirement will be calculated according to the same methodology applicable to the institution included in Segment 5 (S5).
Related Links (in Portuguese)
Comment Due Date: January 26, 2021
Keywords: Americas, Brazil, Banking, PMI, CCyB, ACCP, Regulatory Capital, Basel, BCB
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.
Pierre-Etienne Chabanel
Brings expertise in technology and software solutions around banking regulation, whether deployed on-premises or in the cloud.
Previous Article
ACPR Updates Taxonomy Controls for CREDITHAB Reporting TaxonomyNext Article
BCL Updates SDMX Schema for AnaCredit ReportingRelated Articles
FED Revises Capital Planning and Stress Testing Requirements for Banks
FED finalized a rule that updates capital planning requirements to reflect the new framework from 2019 that sorts large banks into categories, with requirements that are tailored to the risks of each category.
ECB Releases Results of Bank Lending Survey for Fourth Quarter of 2020
ECB published results of the quarterly lending survey conducted on 143 banks in the euro area.
ESAs Publish Reporting Templates for Financial Conglomerates
ESAs published the final draft implementing technical standards on reporting of intra-group transactions and risk concentration of financial conglomerates subject to the supplementary supervision in EU.
EBA Publishes Report on Asset Encumbrance of Banks in EU
EBA published the annual report on asset encumbrance of banks in EU.
MAS Revises Guidelines on Technology Risk Management
MAS revised the guidelines that address technology and cyber risks of financial institutions, in an environment of growing use of cloud technologies, application programming interfaces, and rapid software development.
US Agencies Publish Updates for Call Reports, FFIEC 101, and FR Y-9C
FED updated the reporting form and instructions for the FR Y-9C report on consolidated financial statements for holding companies.
EBA Proposes Guidelines for Establishing Intermediate Parent Entities
EBA issued a consultation paper on the guidelines on monitoring of the threshold and other procedural aspects of the establishment of intermediate EU parent undertakings, or IPUs, as laid down in the Capital Requirements Directive.
EC Adopts Financial Reporting Changes Arising from Benchmark Reforms
EC published Regulation 2021/25 that addresses amendments related to the financial reporting consequences of replacement of the existing interest rate benchmarks with alternative reference rates.
BIS Bulletin Examines Key Elements of Policy Response to Cyber Risk
BIS published a bulletin, or a note, that examines the cyber threat landscape in the context of the pandemic and discusses policies to reduce risks to financial stability.
HMT Updates List of Post-Brexit Equivalence Decisions in UK
HM Treasury, also known as HMT, has updated the table containing the list of the equivalence decisions that came into effect in UK at the end of the transition period of its withdrawal from EU.
