BNB has set the level of countercyclical capital buffer (CCyB) applicable to credit risk exposures in the Republic of Bulgaria at the rate of 1% for the third quarter of 2020. The level of the CCyB applicable to credit risk exposures in the Republic of Bulgaria remains 0% until the end of the third quarter of 2019, 0.5% for the fourth quarter of 2019 and the first quarter of 2020 and 1% for the period April-June 2020. The Governing Council of BNB will make a decision on the level of buffer applicable in the fourth quarter of 2020 in September 2019.
Trends from previous quarters for increased activity on the credit market in the country remain. In times of increased lending, BNB states that it is possible to start gradually accumulating cyclical risks that would occur if the ability of borrowers to service obligations weakened in the event of a possible downturn in economic activity and an increase in risk premiums included in interest rates. Maintaining an anti-cyclical capital buffer in a period of favorable economic conditions may contribute to preserving and further enhancing the capital position of the banking system, thus enhancing the sustainability of credit institutions in future credit risk realization.
Related Links (in Bulgarian)
Keywords: Europe, EU, Bulgaria, Banking, CCyB, Regulatory Capital, Basel III, BNB
Previous ArticleSRB Launches 2020 Data Collection Cycle for Resolution Reporting
PRA published the policy statement PS8/21, which contains the final supervisory statement SS3/21 on the PRA approach to supervision of the new and growing non-systemic banks in UK.
EBA published a report that sets out the final draft regulatory technical standards specifying the conditions according to which consolidation shall be carried out in line with Article 18 of the Capital Requirements Regulation (CRR).
EBA updated the list of other systemically important institutions (O-SIIs) in EU.
BCBS published two reports that discuss transmission channels of climate-related risks to the banking system and the measurement methodologies of climate-related financial risks.
UK Authorities (FCA and PRA) welcomed the findings of FSB peer review on the implementation of financial sector remuneration reforms in the UK.
PRA and FCA jointly issued a letter that highlights risks associated with the increasing volumes of deposits that are placed with banks and building societies via deposit aggregators and how to mitigate these risks.
MFSA announced that amendments to the Banking Act, Subsidiary Legislation, and Banking Rules will be issued in the coming months, to transpose the Capital Requirements Directive (CRD5) into the national regulatory framework.
EC finalized the Delegated Regulation 2021/598 that supplements the Capital Requirements Regulation (CRR or 575/2013) and lays out the regulatory technical standards for assigning risk-weights to specialized lending exposures.
OSFI launched a consultation to explore ways to enhance the OSFI assurance over capital, leverage, and liquidity returns for banks and insurers, given the increasing complexity arising from the evolving regulatory reporting framework due to IFRS 17 (Insurance Contracts) standard and Basel III reforms.
ECB published results of the benchmarking analysis of the recovery plan cycle for 2019.