List of other systemically important institutions
The capital buffer for other systemically important institutions (the “O-SII buffer”) should mitigate risks connected with potential destabilisation of systemically important institutions, which could have significant adverse effects on the financial system and the economy as a whole. The buffer should make key institutions in the banking sector more resilient to adverse developments, enabling banking services to be provided to the real economy without disruption. The CNB is required to draw up a list of O-SIIs – and set the buffer for individual O-SIIs where appropriate – at least once a year.
List of O-SIIs
The CNB draws up a list of O-SIIs on the basis of domestic institutions’ systemic importance scores. In setting the scores, the CNB fully follows the guidelines of the EBA (EBA/GL/2014/10, “Guidelines”). In accordance with paragraph 5 of the Guidelines, it calculates a score for each relevant entity at the highest consolidation level of the part of the group that falls under its jurisdiction, including subsidiaries in other Member States and third countries. The CNB applies two discretions allowed by the Guidelines. In accordance with paragraph 12 of the Guidelines, it exempts investment firms from the calculation, as they do not play an important enough role in the Czech financial system. In accordance with paragraph 9 of the Guidelines, it raises the threshold for designating entities as O-SIIs from the base level (350 basis points, i.e. 3.5%) to the highest level allowed by the Guidelines (425 basis points, i.e. 4.25%). This aims to ensure the highest possible homogeneity of the group of O-SIIs.
In the most recent review in July 2021 using data as of the end of 2021 Q1, the following consolidated groups were designated as O-SIIs for 2022 given the threshold of 4.25%:
|Other systemically important institutions||Score in %|
|Československá obchodní banka||22.5|
|UniCredit Bank Czech Republic and Slovakia||11.0|
Due to their designation as O-SIIs, the CNB sets an additional capital requirement for the relevant institutions, which are required to meet it on a solo and consolidated basis as of 1 October 2021. To set the O-SII buffer, the CNB uses the bucketing approach (with the option of adjustments based on supervisory assessments), where the systemic importance score intervals correspond to specific O-SII buffer rates. The maximum O-SII buffer rate is 3%. In the case of domestic institutions that are subsidiaries of foreign corporations identified by their home supervisors as other or global systemically important institutions (O-SIIs or G-SIIs), the upper limit on the O-SII buffer rate may be set no more than 1 percentage point above the buffer rate set for O-SIIs or G-SIIs of the foreign corporations. Detailed information on the CNB’s approach to the setting of the O-SII buffer is available in the thematic article on financial stability entitled The CNB’s approach to setting the capital buffer for other systemically important institutions: Past and present.
Table – List of other systemically important institutions and the capital buffer rate
|Name of consolidated group||Status in 2021 (from 1 October 2021)* and in 2022||Status in 2021 (until 1 October 2021)*||Status in 2020||Status in 2019||Status in 2018||Status in 2017||Status in 2016|
|Included in the list||Rate||Included in the list||Rate||Included in the list||Rate||Included in the list||Rate||Included in the list||Rate||Included in the list||Rate||Included in the list||Rate|
|Československá obchodní banka||Yes||2,5%||Yes||-||Yes||-||Yes||-||Yes||-||Yes||-||Yes||-|
|UniCredit Bank Czech Republic and Slovakia||Yes||1,5%||Yes||-||Yes||-||Yes||-||Yes||-||Yes||-||Yes||-|
|PPF Financial Holdings B.V.||No||-||No**||-||Yes||-||Yes||-||Yes||-||Yes||-||Yes||-|
|Jakabovič & Tkáč||No||-||No**||-||No||-||Yes||-||Yes||-||Yes||-||Yes||-|
*The CNB was using the systemic risk buffer to mitigate risks associated with the systemic importance of institutions until October 2021. Since the transposition of CRD V took effect on 1 October 2021, the CNB uses the J-SVI buffer for these purposes.
**PF Financial Holdings a.s. was excluded from the list of O-SIIs as of 28 June 2021 due to the applicability of the new provisions of CRR II.