Insider Economy CBC sets countercyclical capital buffer at 0%

CBC sets countercyclical capital buffer at 0%

On 18 June 2019, the Central Bank of Cypus (CBC), in accordance with the methodology described in its macroprudential policy, set the countercyclical capital buffer CCyB rate for the period 1 July 2019 – 30 September 2019 at 0% of the total risk exposure amount of:

(a) each licenced credit institution and
(b) each investment firm that:
i. provides the investment services of dealing on own account or underwriting of financial instruments and / or placing of financial instruments on a firm commitment basis; and
ii. has not been exempted by the CBC due to its small or medium size.

Based on the time series ending on 31 December 2018:

  • The gap between the credit-to-GDP ratio and its long term trend (credit-to-GDP gap) based on the broad credit definition is -64,1%
  • The gap between the credit-to-GDP ratio and its long term trend (credit-to-GDP gap) based on the narrow (bank) credit definition is -87,7%.

Given that the credit-to-GDP gap is lower than 2% and taking into account the additional indicators that were assessed by the CBC, the benchmark buffer guide is 0% and the CCyB rate has been set at 0%.

In addition to the credit-to-GDP gap, the CBC takes into account a range of quantitative and qualitative information in its assessment of system-wide risks associated with periods of excessive growth.  The additional indicators assessed by the CBC are: non-financial private sector indebtedness; banking sector resilience; the real estate market; the real economy; and external imbalances.

(Cyprus News Agency)

Top Stories

Trump says protesters would have met ‘vicious dogs’ if White House fence breached

U.S. President Donald Trump on Saturday said demonstrators protesting the death of a black man who died after a white police officer knelt on...

Paphos: Police publish photos of stolen valuables

  Police have found jewellery, watches and other valuables in the possession of a 22 year old and a 15 year old who are under...

Protests flare around the United States over Minneapolis killing

Violent protests flared overnight in several U.S. cities as demonstrators vented their anger over the killing of George Floyd, a black man who died...

Just one new Covid-19 case on Saturday; total at 943

  One person has tested positive for coronavirus from a total of 2061 tests, the Health Ministry said on Saturday, bringing the total since the...

Paphos: 10 hotels to reopen in June

  Ten of the 57 hotels in the Paphos district are expected to reopen in June, the president of the Paphos branch of the Cyprus...

Taste

Local cuisine: An introduction

Rich in fresh ingredients and tasty herbs, offers the very best of Mediterranean culinary delights. Head out to a tavern and feast on a...

Spiced lamb with beetroot salad and scented yoghurt

Lay the lamb on a tray, skin side down. Rub with crushed garlic, sprinkle with spices and ground pistachios, wrap in plastic wrap and...

Easy seafood pasta with white wine sauce

Ingredients: 2-3 tbsp olive oil 1 garlic clove, chopped 2-3 tablespoons of whipped cream 1/3 cup white wine 300g spaghetti, roughly broken 300-400g of...

Traditional salads that will blow your mind away

This traditional salads will make you actually love salads! Cyprus may be famous for souvla and kleftiko but if you try the traditional salads with...