Featured Product

    CNB Relaxes Mortgage Limits, Reduces Capital Buffer

    July 08, 2020

    The CNB Board has confirmed the limit for the loan-to-value (LTV) indicator at 90% and abolished the limit for the debt-service-to-income (DSTI) indicator. The Board also reduced the countercyclical capital buffer rate for banks to 0.5%, with effect from July 01, 2020 (from the current level of 1%). The partial release of the countercyclical capital buffer will support the ability of banks to lend to non-financial corporations and households. In the event of a significant increase in credit losses of banks amid the pandemic, CNB stated that it is prepared to fully release the countercyclical capital buffer to support the ability of banks to lend smoothly to non-financial corporations and households. These decisions were based on the financial stability report for 2019-2020, which CNB published on July 08, 2020 and which identities risks to the financial stability of the Czech Republic for the near future.

    The financial stability report indicates that available unofficial data for the first months of 2020 suggest that measures against the COVID-19 pandemic have not yet had a significant effect on residential property prices. However, due to unfavorable developments in the real economy, there is potential for a decline in the coming quarters. The report highlights that situation in the domestic financial sector changed radically with the outbreak of the COVID-19 pandemic. The domestic financial sector, which continued to grow in most segments in 2019, entered the COVID-19 crisis in good shape. The main task of both micro-prudential and macro-prudential policies is now to ensure that the banking sector is sufficiently resilient to the effects of the COVID-19 crisis. The capital adequacy of the banking sector is robust for the time being. Most banks currently meet the aggregate capital requirement and have sufficient spare capacity to lend. In addition to the combined capital reserve, capital surplus and profit retained in accordance with the CNB recommendation also play a significant role in the capital cushion above the regulatory minimum. CNB asserts that it is ready to use all its supervisory and regulatory tools to maintain this situation.

     

    Related Links (in Czech) 

    Keywords: Europe, Czech Republic, Banking, Financial Stability Report, CCyB, RRE, COVID-19, DSTI, Financial Stability, Credit Risk, CRE, LTV, CNB

    Featured Experts
    Related Articles
    News

    EBA Proposes Standards for IRRBB Reporting Under Basel Framework

    The European Banking Authority (EBA) proposed implementing technical standards on the interest rate risk in the banking book (IRRBB) reporting requirements, with the comment period ending on May 02, 2023.

    January 31, 2023 WebPage Regulatory News
    News

    FED Issues Further Details on Pilot Climate Scenario Analysis Exercise

    The U.S. Federal Reserve Board (FED) set out details of the pilot climate scenario analysis exercise to be conducted among the six largest U.S. bank holding companies.

    January 17, 2023 WebPage Regulatory News
    News

    US Agencies Issue Several Regulatory and Reporting Updates

    The Board of Governors of the Federal Reserve System (FED) adopted the final rule on Adjustable Interest Rate (LIBOR) Act.

    January 04, 2023 WebPage Regulatory News
    News

    ECB Issues Multiple Reports and Regulatory Updates for Banks

    The European Central Bank (ECB) published an updated list of supervised entities, a report on the supervision of less significant institutions (LSIs), a statement on macro-prudential policy.

    January 01, 2023 WebPage Regulatory News
    News

    HKMA Keeps List of D-SIBs Unchanged, Makes Other Announcements

    The Hong Kong Monetary Authority (HKMA) published a circular on the prudential treatment of crypto-asset exposures, an update on the status of transition to new interest rate benchmarks.

    December 30, 2022 WebPage Regulatory News
    News

    EU Issues FAQs on Taxonomy Regulation, Rules Under CRD, FICOD and SFDR

    The European Commission (EC) adopted the standards addressing supervisory reporting of risk concentrations and intra-group transactions, benchmarking of internal approaches, and authorization of credit institutions.

    December 29, 2022 WebPage Regulatory News
    News

    CBIRC Revises Measures on Corporate Governance Supervision

    The China Banking and Insurance Regulatory Commission (CBIRC) issued rules to manage the risk of off-balance sheet business of commercial banks and rules on corporate governance of financial institutions.

    December 29, 2022 WebPage Regulatory News
    News

    HKMA Publications Address Sustainability Issues in Financial Sector

    The Hong Kong Monetary Authority (HKMA) made announcements to address sustainability issues in the financial sector.

    December 23, 2022 WebPage Regulatory News
    News

    EBA Updates Address Basel and NPL Requirements for Banks

    The European Banking Authority (EBA) published regulatory standards on identification of a group of connected clients (GCC) as well as updated the lists of identified financial conglomerates.

    December 22, 2022 WebPage Regulatory News
    News

    ESMA Publishes 2022 ESEF XBRL Taxonomy and Conformance Suite

    The General Board of the European Systemic Risk Board (ESRB), at its December meeting, issued an updated risk assessment via the quarterly risk dashboard and held discussions on key policy priorities to address the systemic risks in the European Union.

    December 22, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8699