CBIRC and PBC Establish CCyB Mechanism in China, Set CCyB at 0%
CBIRC and PBC issued a notice establishing the mechanism for countercyclical capital buffer (CCyB), which came into force as of September 30, 2020. The notice specifies the provision methods, coverage, and evaluation mechanism of CCyB in China, by referring to international practices as well as the relevant requirements put forward by BCBS. In line with the current systemic financial risk assessments and pandemic containment needs, the ratio for CCyB shall be initially set at zero and banking financial institutions shall be free from the extra capital management requirements.
CBIRC and PBC will take into consideration factors such as macroeconomic and financial conditions, the level of leverage ratio, and soundness of the banking sector in a comprehensive manner. The requirements for CCyB will be re-evaluated and adjusted on a regular basis to forestall systemic financial risks. The establishment of the mechanism for CCyB serves as a significant move to improve the macro-prudential policy framework and enrich the macro-prudential policy toolkit. It is conducive to further promoting the sound operation of banking financial institutions, enhancing countercyclical adjustments of macro-prudential policies, and cushioning the negative effects of procyclical fluctuations and unexpected shocks of financial risks, with the aim to safeguard the stable operation of the financial system in China.
Related Link (in Chinese): Press Release
Effective Date: September 30, 2020
Keywords: Asia Pacific, China, Banking, CCyB, Basel, Regulatory Capital, Systemic Risk, Macro-Prudential Policy, PBC, CBIRC
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
FIN-FSA Maintains CCyB at 0%, Launches Reporting System ReformRelated Articles
EBA Clarifies Use of COVID-19-Impacted Data for IRB Credit Risk Models
The European Banking Authority (EBA) published four draft principles to support supervisory efforts in assessing the representativeness of COVID-19-impacted data for banks using the internal ratings based (IRB) credit risk models.
BIS Hub Updates Work Program for 2022, Announces New Projects
The Bank for International Settlements (BIS) Innovation Hub updated its work program, announcing a set of projects across various centers.
US Senate Members Seek Details on SEC Proposed Climate Disclosure Rule
Certain members of the U.S. Senate Committee on Banking, Housing, and Urban Affairs issued a letter to the Securities and Exchange Commission (SEC)
EIOPA Consults on Review of Securitization Framework in Solvency II
The European Insurance and Occupational Pensions Authority (EIOPA) published a consultation paper on the advice on the review of the securitization prudential framework in Solvency II.
UK Authorities Issue Regulatory and Reporting Updates for Banks
The Prudential Regulation Authority (PRA) issued a statement on PRA buffer adjustment while the Bank of England (BoE) published a notice on the statistical reporting requirements for banks.
BaFin Consults on Resolvability Requirements for Resolution Planning
The Federal Financial Supervisory Authority of Germany (BaFin) proposed to amend the “Capital Investment Conduct And Organization Ordinance” and issued a draft circular on the minimum resolvability requirements for resolution planning.
EBA Consults on Certain Standards and Guidelines Under CRR and BRRD
The European Banking Authority (EBA) proposed guidelines, for the resolution authorities, on the publication of the write-down and conversion and bail-in exchange mechanic, with the comment period ending on September 07, 2022.
OJK Publishes Regulatory Updates for Financial Sector Entities
The Financial Services Authority of Indonesia (OJK) is strengthening cooperation with the Australian Prudential Regulation Authority (APRA) and the Japanese Financial Services Agency (JFSA)
EU Publishes Rules on DLT and Data Governance
The European Parliament and the Council published Regulation 2022/868 on European data governance (Data Governance Act).
EBA Publishes Phase 2 of Reporting Framework 3.2
The European Banking Authority (EBA) published phase 2 of its reporting framework 3.2. The technical package supports the implementation of the updated reporting framework by providing standard specifications
