sk sk

Countercyclical capital buffer (CCyB)

Banks build up a countercyclical capital buffer in good times in order to draw it down in bad times when they experience unexpected losses. Národná banka Slovenska sets the CCyB rate according to the extent to which cyclical risks are increasing or declining.

Red cushion
Buffer rate for Slovak exposures

The CCyB rate has been set at 1.5% since 1 August 2023, under a decision adopted on 20 June 2022.

Buffer rates for foreign exposures

The buffer rates can be found on the webpages of the European Systemic Risk Board (ESRB) and Bank for International Settlements (BIS).

NBS has not issued any decision increasing the buffer rate for exposures in third countries (outside the European Economic Area), nor has it identified any third country for which such a decision would need to be issued.

The only non-EEA authority that has implemented a non-zero CCyB rate is the Hong Kong Monetary Authority, and this buffer also applies to Slovak banks’ exposures to Hong Kong.

Methodology

The evolution of risks is assessed in the quarterly Macroprudential Commentary.

In the light of potential losses from such risks, the Bank Board of Národná banka Slovenska may decide to adjust the CCyB rate. The rate generally ranges between 0% and 2.5% in multiples of 25 basis points.

The CCyB must be made up of the highest quality capital – Common Equity Tier 1 (CET1).

The amount of capital that the CCyB ties up in a given bank depends mainly on the CCyB rate applied in Slovakia and the amount of the bank’s domestic exposures. If the bank has exposures to other countries, it must follow the CCyB rates applied in those countries and hold additional capital accordingly.

Legislation

The statutory framework for capital buffers comprises, for Slovak exposures, Sections 33a to 33e of the Banking Act and, for foreign exposures, Section 33f of the Banking Act. NBS sets the CCyB rate through secondary legislation in the form of decisions.

The values of the indicators published on the basis of Section 33g(6) of the Banking Act in accordance with Recommendation ESRB/2014/1 can be found in financial stability data.

Further information can be found in financial stability legislation.

White cards with a paragraph symbol