Featured Product

    CNB Examines Financial Sector Stability, Increases CCyB Rate to 1%

    June 15, 2021

    The CNB Board decided to increase the countercyclical capital buffer (CCyB) rate to 1%, with effect from July 01, 2022. The Board also decided to reduce the frequency of the two-week liquidity-providing repo operations for credit institutions to once a week, with effect from May 28, 2021, and to reintroduce the previously applied interest rate mark-up of 0.1 pp. However, a decision was made to keep the recommended loan-to-value (LTV) limit unchanged at 90%, with the option of applying a 5% exemption.

    At this time, CNB does not deem it immediately necessary to set debt-to-income (DTI) and debt service-to-income (DSTI) limits or to tighten the other parameters of the existing recommendation on the management of risks associated with the provision of mortgage loans issued in April 2020. CNB regards the high and increasing share of loans with a DTI ratio of over 8% and a DSTI ratio of over 40% as a potential source of systemic risk. Therefore, lenders are advised to ensure that such loans are only provided to applicants that are highly likely to repay without problems. CNB would have to react using macro-prudential policy tools to any further easing of credit standards and taking on of additional risks. During the meeting, the CNB Board also discussed the Spring Financial Stability Report, noting that a significant source of systemic risk in the domestic economy is the repeated reversal of the spiral between debt financing for the purchase of residential real estate and its rapidly rising prices. Despite the pandemic, residential property prices in the Czech Republic have risen and are now about 70% higher than they were at their lowest point at the end of 2013, thus making housing less affordable. This report is the foundation for the decisions regarding macro-prudential policy instruments, which above all include the countercyclical capital buffer (CCyB) of banks and limits on mortgage lending indicators.

     

    Related Links 

    Keywords: Europe, Czech Republic, Banking, CCyB, Credit Risk, Macro-Prudential Policy, Systemic Risk, Regulatory Capital, Basel, Mortgage Lending, DSTI, DTI, LTV, Financial Stability Report, CNB

    Featured Experts
    Related Articles
    News

    ECB Further Reviews Costs and Benefits Associated with IReF

    The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.

    September 15, 2022 WebPage Regulatory News
    News

    BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules

    The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.

    September 15, 2022 WebPage Regulatory News
    News

    IOSCO Welcomes Work on Sustainability-Related Corporate Reporting

    The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)

    September 15, 2022 WebPage Regulatory News
    News

    EBA Publishes Funding Plans Report, Receives EMAS Certification

    The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).

    September 15, 2022 WebPage Regulatory News
    News

    BoE Allows One-Day Delay in Statistical Data Submissions by Banks

    The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.

    September 14, 2022 WebPage Regulatory News
    News

    ACPR Amends Reporting Module Timelines Under EBA Framework 3.2

    The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.

    September 14, 2022 WebPage Regulatory News
    News

    APRA to Modernize Prudential Architecture, Reduces Liquidity Facility

    The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.

    September 12, 2022 WebPage Regulatory News
    News

    PBC Issues List of Systemic Banks, Adds 2 Foreign Banks to CERB List

    The China Banking and Insurance Regulatory Commission (CBIRC) published the administrative measures for internal control of wealth management companies, which come into force on the day of promulgation.

    September 09, 2022 WebPage Regulatory News
    News

    PRA Publishes Discussion Paper on Its Future Approach to Policy

    The Prudential Regulation Authority (PRA) proposed its approach to policy-making as it takes on wider rulemaking responsibilities under the Financial Services and Markets Bill.

    September 08, 2022 WebPage Regulatory News
    News

    ECB Publishes Opinion on Proposed Regulation on Data Act

    The European Central Bank (ECB) published its opinion on the proposal for a regulation on harmonized rules on fair access to and use of data (Data Act).

    September 08, 2022 WebPage Regulatory News
    RESULTS 1 - 10 OF 8511