DNB Reduces Systemic Risk Buffer Requirement for Certain Banks
DNB announced publication of the amended Capital Requirements Directive and Regulation (CRD IV and CRR) 2019 Specific Provisions Regulation, in context of the systemic risk buffer requirements, in the Government Gazette in April 2020. The amended regulation shall enter into force on the day after it is published in the Government Gazette. DNB is committed to continuing to guarantee the stability of the financial sector amid COVID-19 outbreak. Against this backdrop, on March 17, DNB decided to reduce the systemic risk buffer requirement for three major banks—ING, Rabobank, and ABN Amro. DNB is lowering systemic risk buffer from 3% of global risk-weighted exposures to 2.5% for ING, 2% for Rabobank, and 1.5% for ABN Amro.
The above-mentioned regulation has been amended to allow the announced adjustment of the systemic risk buffer. This reduction in buffer will help banks to support lending to the Dutch economy. In time, the reduction in the buffer requirements will be compensated by a gradual increase in the countercyclical capital buffer to 2% of Dutch risk-weighted exposures. In effect, the total buffer requirement for these banks will eventually return to the current level. The gradual build-up of this buffer will begin once conditions have normalized. DNB had consulted on amendment to the CRD IV and CRR 2019 Specific Provisions Regulation, in connection with the systemic risk buffer, from March 23, 2020 to April 06, 2020.
- Notification (in Dutch)
- Press Release on Lowering Systemic Risk Buffer
- Press Release, March 17, 2020
Effective Date: April 18, 2020
Keywords: Europe, Netherlands, Banking, Systemic Risk Buffer, Systemic Risk, CRD IV, CRR, Specific Provisions Regulation, COVID-19, Regulatory Capital, DNB
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