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
Previous ArticleBI, OJK, and LPS Establish Integrated Reporting Portal for Banks
ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.
EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.
HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.
EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).
BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.
FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.
EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.
FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.
EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.
The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.