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
BSP Tackles Aspects of Lending and Islamic, Open & Sustainable Finance
The Central Bank of the Philippines (BSP) issued communications covering developments related to online lending platforms, open finance framework and roadmap, and on the expected regulations in the area sustainable finance.
US Agencies Issue Regulatory Updates, FDIC Launches Tech Sprint
The Board of Governors of the Federal Reserve System (FED) published the final rule that amends Regulation I to reduce the quarterly reporting burden for member banks by automating the application process for adjusting their subscriptions to the Federal Reserve Bank capital stock, except in the context of mergers.
EBA Issues Guide on Bank Resolvability, Consults on Transferability
The European Banking Authority (EBA) published its assessment of risks through the quarterly Risk Dashboard and the results of the Autumn edition of the Risk Assessment Questionnaire (RAQ).
MFSA Publishes CRD5 Updates and Supervisory Priorities for 2022
The Malta Financial Services Authority (MFSA) updated the guidelines on supervisory reporting requirements under the reporting framework 3.0.
HKMA Extends Repayment for Trade Facilities, Consults on Crypto-Assets
The Hong Kong Monetary Authority (HKMA) published a circular, along with the reporting form and instructions, for self-assessment, by authorized institutions, of compliance with the Code of Banking Practice 2021.
FCA Registers Securitization Repositories; PRA Issues 2022 Priorities
The Financial Conduct Authority (FCA) decided to register European DataWarehouse Ltd and SecRep Limited as securitization repositories under the UK Securitization Regulation, with effect from January 17, 2022.
EC Regulation Sets Out Methods for Measuring K-Factors Under IFR
The European Commission (EC) published the Delegated Regulation 2022/25, which supplements the Investment Firms Regulation (IFR or Regulation 2019/2033) with respect to the regulatory technical standards specifying the methods for measuring the K-factors referred to in Article 15 of the IFR.
BIS Studies How Platform Models Impact Financial Stability & Inclusion
The Bank of International Settlements (BIS) published a paper that assesses the ways in which platform-based business models can affect financial inclusion, competition, financial stability and consumer protection.
CBE Issues Additional Measures to Ease Disruptions from Pandemic
The Central Bank of Egypt (CBE) published a circular with instructions on emergency liquidity assistance to banks that are unable to meet their liquidity requirements.
ESAs Publish List of Financial Conglomerates for 2021
The European Supervisory Authorities (ESAs) published the list of identified financial conglomerates for 2021.
