CNB Announces Decisions on CCyB and Systemic Risk Buffers
CNB decided to leave the systemic risk buffer rates for the five most systemically important banks unchanged from January 01, 2021 onward. The rates will thus remain at 3% for Česká spořitelna, ČSOB, and Komerční banka; 2% for UniCredit Bank; and 1% for Raiffeisenbank. After transposition of the Capital Requirements Directive (CRD) V into the national legislation, CNB will start to use the buffer for other systemically important institutions (O-SIIs), instead of the systemic risk buffer to mitigate risks connected with the systemic importance of banks. A systemic risk buffer is expressed as a percentage of the overall risk exposure of a bank and must consist of the Common Equity Tier 1 capital of a bank.
In addition, the CNB Board decided to leave the countercyclical capital buffer (CCyB) rate for exposures in the Czech Republic at 0.50%. Earlier, on June 18, 2020, the CNB Board had decided to lower the CCyB to 0.50%, with effect from July 01, 2020. Banks and credit unions shall apply this rate for calculating the combined buffer requirement from October 01, 2021. Obliged institutions are required to create this buffer on the basis of the regulator’s instructions in periods of excessive growth in lending. Excessive lending growth usually increases financial imbalances and leads to a rise in systemic risk. By contrast, at times of falling economic activity, accompanied by rising credit losses, this buffer should be released so that non-financial corporations and households continue to have access to loans without excessively tight conditions. The CCyB is set in the Czech Republic by the Czech National Bank on a quarterly basis.
Related Links
Keywords: Europe, Czech Republic, Banking, CCyB, Systemic Risk Buffer, CRD5, Systemic Risk, Regulatory Capital, Basel, Macro-Prudential Policy, CNB
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
HKMA Revises Regulatory Framework for Supervision of Liquidity RiskRelated Articles
EBA Publishes Phase 1 of Reporting Framework 3.1
EBA published the phase 1 of its reporting framework 3.1, with the technical package covering the new reporting requirements for investment firms (under the implementing technical standards on investment firms reporting).
UK Government to Set Out Rules on Wind-down of Critical Benchmarks
HM Treasury notified that, after considering all responses, the government intends to bring forward further legislation, when the Parliamentary time allows, to address issues identified in the consultation on supporting the wind-down of critical benchmarks.
EIOPA Launches Stress Test for Insurance Sector in EU
EIOPA launched the 2021 stress test for the insurance sector in EU.
UK Authorities Publish Third Edition of Regulatory Initiatives Grid
UK authorities jointly published the third edition of Regulatory Initiatives Grid setting out the planned regulatory initiatives for the next 24 months.
EC Consults on Regulation on Non-Financial Sustainability Disclosures
EC is requesting feedback on the proposed Commission Delegated Regulation on the content, methodology, and presentation of information that large financial and non-financial undertakings should disclose about their environmentally sustainable economic activities under the Taxonomy Regulation.
OSFI Outlines Prudential Policy Priorities for Coming Months
OSFI has set out the near-term priorities for federally regulated financial institutions and federally regulated private pension plans for the coming months until March 31, 2022.
BIS Announces TechSprint on Innovative Green Finance Solutions
Under the Italian G20 Presidency, BIS Innovation Hub and the Italian central bank BDI launched the second edition of the G20 TechSprint on the lookout for innovative solutions to resolve operational problems in green and sustainable finance.
ACPR Publishes Version 1.0.0 of RUBA Taxonomy
ACPR published Version 1.0.0 of the RUBA taxonomy, which will come into force from the decree of January 31, 2022.
EBA Proposed Regulatory Standards for Central Database on AML/CFT
EBA proposed the regulatory technical standards on a central database on anti-money laundering and countering the financing of terrorism (AML/CFT) in EU.
ECB Responds to EC Consultation on Crisis Management Framework
ECB published its response to the targeted EC consultation on the review of the bank crisis management and deposit insurance framework in EU.
