BNB Sets Countercyclical Buffer at 1.5% for First Quarter of 2021
The Governing Council of BNB has set the level of the countercyclical capital buffer (CCyB) applicable to credit risk exposures in the Republic of Bulgaria to 1.5%, for the first quarter of 2021. The level of the countercyclical buffer applicable to credit risk exposures in the Republic of Bulgaria remains 0.5% until the end of the first quarter of 2020 and 1% from April to December 2020. However, the decision on the level applicable in the second quarter of 2021 is due in March 2020.
Lending activity in the housing and consumer loans segment in Bulgaria remains high. The continued retention of low interest rates could lead to a significant increase in debt, which would make the banking sector's asset quality, profitability, and capital position more sensitive in the event of any adverse changes in the economic environment. Given that ability of borrowers to service debt can weaken in the eventual future decline in economic activity, this increase in the CCyB level is intended to enhance resilience of the banking sector to such developments.
Related Links (in Bulgarian)
Keywords: Europe, Bulgaria, Banking, CCyB, Credit Risk, Basel III, Regulatory Capital, BNB
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
BI, OJK, and LPS Establish Integrated Reporting Portal for BanksRelated 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.
EP Reaches Agreement on Corporate Sustainability Reporting Directive
The European Council and the European Parliament (EP) reached a provisional political agreement on the Corporate Sustainability Reporting Directive (CSRD).
PRA Consults on Model Risk Management Principles for Banks
The Prudential Regulation Authority (PRA) launched a consultation (CP6/22) that sets out proposal for a new Supervisory Statement on expectations for management of model risk by banks.
EC Regulation Amends Standards for Calculating Credit Risk Adjustments
The European Commission (EC) published the Delegated Regulation 2022/954, which amends regulatory technical standards on specification of the calculation of specific and general credit risk adjustments.
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.
EIOPA Issues Cyber Underwriting Proposal, Statement on Open Insurance
The European Insurance and Occupational Pensions Authority (EIOPA) published two consultation papers—one on the supervisory statement on exclusions related to systemic events and the other on the supervisory statement on the management of non-affirmative cyber exposures.
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.
BCBS Issues Climate Risk Principles while HKMA Expresses Its Support
The Basel Committee on Banking Supervision (BCBS) issued principles for the effective management and supervision of climate-related financial risks.