CNB leaves countercyclical capital buffer rate at 1.5%

The CNB Bank Board has decided to leave the countercyclical capital buffer rate for exposures located in the Czech Republic at 1.5%.

The CNB Bank Board decided to leave the rate for exposures located in the Czech Republic at the current level at its meeting on 30 August 2018. The CNB used this rate for the first time at the end of 2015, setting it at 0.5% with effect from 1 January 2017. The Bank Board decided to raise it to 1.0% in May 2017 with effect from 1 July 2018 and in December 2017 increased it further to 1.25% with effect from 1 January 2019. The latest change in the rate occurred on 17 May 2018, when the Bank Board decided to increase it to 1.5% with effect from 1 July 2019.

The countercyclical capital buffer was introduced as an important macroprudential policy instrument in the European Union in 2014. Obliged institutions are required to create this buffer on the basis of the regulator’s instructions in periods of excessive growth in lending. Excessive lending growth usually increases financial imbalances and leads to a rise in systemic risk. By contrast, at times of falling economic activity, accompanied by rising credit losses, this buffer should be released so that non-financial corporations and households continue to have access to loans without excessively tight conditions.

More details on this decision are available in the Provision of a general nature on setting the countercyclical capital buffer rate for the Czech Republic III/2018.

Markéta Fišerová
Director of the Communications Division and CNB Spokesperson

• More information about the countercyclical capital buffer on the CNB website
• Information about the setting of the countercyclical capital buffer in other European countries on the website of the European Systemic Risk Board (external link)