Statement from the NBS Bank Board’s 9th meeting of 2020
The Bank Board of Národná banka Slovenska today (28 April) held its 9th meeting of 2020, chaired by NBS Governor Peter Kažimír.
The Bank Board took note of NBS’s April 2020 Monthly Bulletin.
The Bank Board approved the NBS Annual Report for 2019, which will be published on the NBS website.
The Bank Board decided to leave the countercyclical capital buffer (CCyB) rate unchanged at 1.50% and repealed its existing decision to increase the rate to 2.00% as from 1 August 2020.
Having regard to the fact that the buffer is supposed to be increased when credit growth is excessive and imbalances are therefore building up, the Bank Board decided to repeal the decision to increase the CCyB rate mainly on the grounds that excessive credit is no longer present and that risks are gradually shifting from an accumulation phase to a materialisation phase. Another reason for the Bank Board’s deciding not to increase the rate was the fact that most banks in Slovakia have decided not to pay dividends for 2019 and to retain earnings for that year in order to strengthen their capital position.
The CCyB rate will remain at 1.50% for the time being. This is because no significant losses are currently being reported in the Slovak banking sector, and because – given the measures adopted by the Slovak Government and the regulatory measures taken – the Bank Board does not expect any substantial increase in bank losses in the near term. At the same time, the ECB has announced measures that provide banks with significant relief on their capital requirements, thus helping to ensure they are in a position to continue financing households and corporates.
The Bank Board stands ready to reduce the CCyB rate should the banking sector need to absorb losses or should capital be needed to support lending growth, and, if necessary, it will do so even outside its regular quarterly decisions on the CCyB rate and with immediate effect.
The current setting of the CCyB rate for domestic exposures, adopted under a previous decision of the Bank Board, is as follows:
Period of application
1 August 2019
The Bank Board approved a document entitled “Strategic document – investment in corporate bonds” (Strategický dokument – investície do podnikových dlhopisov).
This document sets out the procedures and approaches which the NBS supervisory divisions follow in order to ensure that sales of corporate bonds are conducted with due professional care.
The Bank Board approved draft terms for the establishment of a framework for the use of additional credit claims in Eurosystem monetary policy operations in Slovakia. This framework, whose terms are subject to approval by the ECB’s Governing Council, will allow credit claims to be accepted as collateral in Eurosystem operations even if they are not eligible claims under the Eurosystem’s standard criteria. This will ease Slovak banks’ access to liquidity provided by the Eurosystem.
National Bank of Slovakia
Imricha Karvasa 1, 813 25 Bratislava, Slovak Republic
Tel.: +421-2-5787 2142, +421-2-5865 2142, +421-2-5787 2169, +421-2-5865 2169
Reproduction is permitted provided that the source is acknowledged.