Jan Hájek, Jan Frait, Miroslav Plašil
This article sets out the CNB’s approach to the countercyclical capital buffer in the Czech Republic and describes its decision-nmaking process from assessing the position of the economy in the financial cycle through to setting the buffer rate. The CNB’s approach is based on a set of simple and composite indicators of the financial cycle and systemic risk, but also puts an emphasis on comprehensive expert assessment of developments in the financial sector. The article then describes the factors that the macroprudential authority takes into account when setting the specific countercyclical capital buffer rate. These include estimates of credit losses in the event of adverse shocks and stylised facts about the financial cycle.
Issued: June 2017
Download: Thematic article in the Financial Stability Report 2016/2017 (pdf, 146 kB)