The Belgian central bank NBB has decided to maintain the countercyclical buffer (CCyB) rate for credit risk exposures to the Belgian private non-financial sector at 0% for the fourth quarter of 2020. Based on current projections and risk assessments, NBB expects not to increase the CCyB at least until the third quarter of 2021. However, NBB plans to review the situation on a quarterly basis.
CCyB is a macroprudential instrument designed to mitigate cyclical systemic risk and to counter pro-cyclicality in lending. Its objective is to support the sustainable provision of credit through the cycle by strengthening the resilience of banks.
Capital buffers are imposed whenever there is an increase in cyclical systemic risks (that is, with excessive growth in lending), so that these additional requirements can be relaxed when the cycle turns and the risks start to decline. If risks emerge in a situation of financial stress, a decision can be taken to release the buffer instantly to put banks in a better position to absorb losses and keep up their level of lending when the economic and financial environment is vulnerable. CCyB rate, expressed as a percentage of risk-weighted assets of banks, is generally between 0.0% and 2.5%, but can be set higher when justified by the underlying risk. Given the significant challenges the global economy is now facing, NBB had announced, on March11, 2020, the full release of CCyB.
Keywords: Europe, EU, Belgium, Banking, CCyB, Macro-Prudential Policy, Systemic Risk, Basel, Regulatory Capital, NBB
The European Commission (EC) published the Delegated Regulation 2021/1527 with regard to the regulatory technical standards for the contractual recognition of write down and conversion powers.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to provide guidance to authorized deposit-taking institutions on the interpretation of APS 120, the prudential standard on securitization.
The Single Resolution Board (SRB) published a Communication on the application of regulatory technical standard provisions on prior permission for reducing eligible liabilities instruments as of January 01, 2022.
The Australian Prudential Regulation Authority (APRA) published a new set of frequently asked questions (FAQs) to clarify the regulatory capital treatment of investments in the overseas deposit-taking and insurance subsidiaries.
The European Banking Authority (EBA) published the final report on the guidelines specifying the criteria to assess the exceptional cases when institutions exceed the large exposure limits and the time and measures needed for institutions to return to compliance.
The Prudential Regulation Authority (PRA) issued the policy statement PS20/21, which contains final rules for the application of existing consolidated prudential requirements to financial holding companies and mixed financial holding companies.
The European Banking Authority (EBA) revised the guidelines on stress tests to be conducted by the national deposit guarantee schemes under the Deposit Guarantee Schemes Directive (DGSD).
The European Commission (EC) announced that Nordea Bank has signed a guarantee agreement with the European Investment Bank (EIB) Group to support the sustainable transformation of businesses in the Nordics.
The Hong Kong Monetary Authority (HKMA) issued a circular, for all authorized institutions, to confirm its support of an information note that sets out various options available in the loan market for replacing USD LIBOR with the Secured Overnight Financing Rate (SOFR).
The Office of the Comptroller of the Currency (OCC) issued a new "Problem Bank Supervision" booklet of the Comptroller's Handbook. The booklet covers information on timely identification and rehabilitation of problem banks and their advanced supervision, enforcement, and resolution when conditions warrant.