ESRB updated the list of countercyclical capital buffer (CCyB) rates applicable in countries in the Eurosystem. In light of the COVID-19 outbreak, several countries have announced that they are reducing their countercyclical capital buffer rates. This is the case, for example, in Belgium, Denmark, Germany, Iceland, Ireland, Norway, Sweden, and the United Kingdom. Additionally, ESRB updated the overview of national macro-prudential in the EU and the European Economic Area. The overview covers several national macro-prudential measures, including capital buffers and reciprocation measures, and the active capital-based measures that apply to the systemically important institutions in a member state.
The key CCyB decisions of various national authorities are as follows:
- NBB has decided to preventively release the full countercyclical buffer for credit risk exposures to the Belgian private non-financial sector. Through this release of the countercyclical buffer, NBB is making approximately EUR 1 billion worth of capital buffers available to Belgian banks to cover potential risks.
- Given the anticipated need for credit in the real economy, BaFin intends to lower the countercyclical capital buffer from 0.25% to 0% as of April 01, 2020. This preventive measure will strengthen the German banking sector’s ability to lend. The buffer is to remain at 0% until at least December 31, 2020.
- Central Bank of Ireland announced that countercyclical capital buffer will be reduced from 1% to 0% no later than April 02, 2020.
- BoE announced that the Financial Policy Committee has reduced the countercyclical capital buffer rate for UK to 0% of banks’ exposures to UK borrowers, with immediate effect. The rate had been 1% and had been due to reach 2% by December 2020. The Financial Policy Committee expects to maintain the 0% rate for at least 12 months, so that any subsequent increase would not take effect until March 2022 at the earliest.
- The Danish Government has decided to release the countercyclical capital buffer and cancel the planned increases meant to take effect later. This will help the credit institutions to continue providing an adequate level of lending.
- Countercyclical Capital Buffer
- Press Release by NBB
- Press Release by Bundesbank
- Press Release by Central Bank of Ireland
- BoE Statement
- Overview of National Macro-Prudential Measures (XLSX)
- National Macro-Prudential Framework
Keywords: Europe, EU, Belgium, Denmark, Germany, Ireland, Iceland, Norway, Sweden, UK, Banking, CCyB, Systemic Risk, ESRB, NBB, Central Bank of Ireland, BoE, Bundesbank
Across 35 years in banking, Blake has gained deep insights into the inner working of this sector. Over the last two decades, Blake has been an Operating Committee member, leading teams and executing strategies in Credit and Enterprise Risk as well as Line of Business. His focus over this time has been primarily Commercial/Corporate with particular emphasis on CRE. Blake has spent most of his career with large and mid-size banks. Blake joined Moody’s Analytics in 2021 after leading the transformation of the credit approval and reporting process at a $25 billion bank.
Previous ArticleEC Announces Expansion of Membership of Sustainable Finance Platform
The European Commission (EC) published the Delegated Regulation 2022/786 with regard to the liquidity coverage requirements for credit institutions under the Capital Requirements Regulation (CRR).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying the criteria to identify shadow banking entities for the purposes of reporting large exposures.
The European Insurance and Occupational Pensions Authority (EIOPA) published a report assessing insurers' exposure to physical climate change risks
The European Commission (EC) published the results of a public consultation, held in October 2021, on the review of the Web Accessibility Directive.
The Network for Greening the Financial System (NGFS) published two reports to aid central banks and regulators in their oversight of the financial sector and in their central bank operations
The Monetary Authority of Singapore (MAS) and the SC-STS are jointly consulting, until June 10, 2022, on setting adjustment spreads for the conversion of legacy SOR contracts to SORA reference rate.
The Office of the Superintendent of Financial Institutions (OSFI) published the strategic plan for 2022-2025 and the departmental plan for 2022-23.
The European Banking Authority (EBA) is consulting, until August 31, 2022, on the draft implementing technical standards specifying requirements for the information that sellers of non-performing loans (NPLs) shall provide to prospective buyers.
The European Council and the Parliament reached an agreement on the revised Directive on security of network and information systems (NIS2 Directive).
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying information that crowdfunding service providers shall provide to investors on the calculation of credit scores and prices of crowdfunding offers.