The Czech National Bank leaves the countercyclical capital buffer rate at 1.5%
The Bank Board of the Czech National Bank decided to leave the countercyclical capital buffer rate at 1.5%. The buffer sufficiently covers the risks for the banking sector arising from the present position of the economy in the expansionary phase of the financial cycle. At the same time, it helps reduce the banking sector’s vulnerability to potential adverse economic developments.
The Czech economy moved further into the expansionary phase of the financial cycle in the first half of 2026. Household credit activity remained high, partly because households increased their borrowing ahead of tighter conditions for investment mortgages and the expected rise in interest rates. At the same time, lending to non-financial corporations for investment strengthened.
The Bank Board made its decision on the countercyclical capital buffer in a situation where the future path of the financial cycle is subject to considerable uncertainty. Only data for the coming period will allow a better assessment of whether the current strong credit growth will persist or start to weaken gradually, partly as a result of the CNB’s recent tightening of domestic macroprudential and monetary policy settings. Although developments to date point to a further increase in cyclical systemic risks, household and non-financial corporate indebtedness remains moderate from a historical perspective and banks are not easing credit standards across the board. At the same time, the banking sector continues to maintain high profitability and strong capitalisation. The case for leaving the CCyB rate unchanged is also supported by continuing uncertainty regarding external economic and geopolitical developments. However, if credit growth and indebtedness in both sectors of the real economy continue to rise and lead to a further movement into the expansionary phase of the financial cycle, the Bank Board stands ready to increase the countercyclical capital buffer rate further, and the likelihood of such a step has increased.
The countercyclical capital buffer for banks’ and credit unions’ exposures located in the Czech Republic is an important macroprudential policy tool for protecting the banking sector against risks arising over the financial cycle. The CNB generally requires banks and credit unions to build up 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 will be available in the Official Information regarding the assessment of the setting of the countercyclical capital buffer rate – September 2026, which will be published on 11 September 2026.
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 2026.
Jakub Holas
Director, Communications Division
[1] Further information on the countercyclical capital buffer is available on the CNB website and on the website of the European Systemic Risk Board (external link).