The Czech National Bank leaves the countercyclical capital buffer rate at 1.25%

At its meeting on financial stability today, the Bank Board decided to leave the countercyclical capital buffer rate unchanged at 1.25%. This decision is based on the current assessment of economic developments, the position of the Czech economy in the financial cycle as well as analyses of cyclical systemic risks and the banking sector’s resilience to a potential economic downturn.

The Czech economy has moved further into the expansionary phase of the financial cycle and the estimated level of cyclical systemic risks remains stable. Economic growth and credit growth are being accompanied by an increase in real wages, good profitability of non-financial corporations and relatively low growth in corporate and household debt. The CNB’s analyses do not indicate that households, corporations and banks are taking on excessive credit risk or debt. Real interest rates remain positive, helping to maintain a balance between economic growth and financial stability. The banking sector as a whole is resilient and the countercyclical capital buffer rate of 1.25% sufficiently limits the sector’s capital vulnerability to a potential economic downturn.

The countercyclical capital buffer for exposures of banks and credit unions located in the Czech Republic is an important macroprudential policy tool to protect the banking sector against risks arising over the financial cycle. The CNB generally requires banks and credit unions to create this buffer in periods of growth in lending when financial imbalances usually start to emerge and cyclical systemic risks increase. By contrast, at times of falling economic activity, accompanied by rising credit losses, the buffer is usually released so that non-financial corporations and households have access to credit without excessively tight conditions.^[1]

More details on the Bank Board’s decision are available in the Official Information regarding the assessment of the setting of the countercyclical capital buffer rate – September 2025, which will be published on 12 September 2025.

The Bank Board decides on the countercyclical capital buffer rate four times a year. The Bank Board’s next meeting on this issue will be held in November 2025.

Jakub Holas
Director, Communications Division

^[1] 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)