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Other systemically important institution buffer (O-SII)

For the most significant domestic banks, the O-SII buffer serves to increase their resilience. These banks are so important to the functioning of the market that if they are in difficulty, so is the whole financial sector.

Financial stability, Other systemically important institution buffer (O-SII)
Recent decisions and Commentary

NBS expanded the list of O-SIIs for 2023 to include Prima banka and increased the buffer rate for Československá obchodná banka. Further information can be found in current Commentary on decisions.

Individual banks
Methodology

Banks are designated as O-SIIs after exceeding a threshold score. This is determined according to a methodology laid down in Guidelines of the European Banking Authority.

The threshold score for O-SII designation is calculated on the basis of indicators in five areas:

  • size (total assets);
  • importance (value of domestic payment transactions; private sector deposits from depositors in the EU, private sector loans to recipients in the EU);
  • complexity (notional value of OTC derivatives; cross-jurisdictional liabilities; cross-jurisdictional claims);
  • interconnectedness (intra-financial system liabilities; intra-financial system assets; debt securities outstanding);
  • additional national specific indicators (total risk exposure amount; retail* loans; retail deposits).

* The retail sector here refers to households, sole traders and non-profit institutions serving mostly households.

The O-SII buffer must be made up of the highest quality capital – Common Equity Tier 1 (CET1).

Legislation

The statutory framework for capital buffers comprises Sections 33a to 33j of the Banking Act. NBS sets the O-SII buffer rates, at least once a year, through secondary legislation in the form of decisions.

Further information can be found in financial stability legislation.

Financial stability, Other systemically important institution buffer (O-SII)