29 September 2021

Increase in countercyclical capital buffer

New Central Bank Rules on Countercyclical Capital Buffers for Financial Undertakings, no. 1076/2021, which were approved at a meeting of the Bank´s Financial Stability Committee (FSN) on 28 September 2021, were published in the Law and Ministerial Gazette today. With the new Rules, the value of the countercyclical capital buffer is increased to 2% of the risk base for financial institutions’ domestic exposures. The increase will take effect twelve months from now.

In the FSN’s opinion, the combination of rapidly rising asset prices and increased household debt has already raised cyclical systemic risk to at least the pre-pandemic level. As a result, the Committee is of the view that the scope granted to financial institutions in March 2020, with the reduction in the buffer, is no longer needed.

The countercyclical capital buffer is reviewed on a quarterly basis, and decisions to increase it generally do not take effect until twelve months later.

Press release no. 24/2021
29 September 2021