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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.

Blue cushion
Recent decisions and Commentary

For 2024, the buffer rates of O-SIIs was set for 6 banks. As from 1. January 2025, the list will be narrowed down to 5 banks and some of their buffer rates will change. Further information can be found in current Commentary on decision (in Slovak).

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.

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