D6-2024 Positive Cycle-Neutral Countercyclical Capital Buffer

D6-2024 Positive Cycle-Neutral Countercyclical Capital Buffer

Decision The European Banking Authority (EBA) hereby issues this Decision pursuant to Article 126 of Regulation (EU) No 575/2013.

Recitals (1) The EBA is required to develop regulatory technical standards on the methodology for determining the positive cycle-neutral countercyclical capital buffer (CCyB). (2) This Decision sets out the methodology for calculating the CCyB based on credit-to-GDP gaps, national discretion, and transitional arrangements. (3) National competent authorities shall apply a CCyB rate between 0% and 2.5%, with the option to set rates up to 3.5% under specific conditions. (4) The CCyB shall be applied to exposures of credit institutions as defined in the Capital Requirements Regulation (CRR). (5) Transitional provisions ensure a smooth implementation for institutions subject to this Decision. (6) This Decision aligns with the EBA’s guidelines on systemic risk and countercyclical capital buffers.

Article 1 Scope and Definitions This Decision applies to credit institutions subject to the CRR. The term 'positive cycle-neutral CCyB' refers to a buffer set above the national discretion floor, adjusted for economic cycles.

Article 2 Methodology for Determining the CCyB Rate National competent authorities shall calculate the CCyB using a linear interpolation method based on the credit-to-GDP gap. The buffer shall range from 0% to 2.5%, with a maximum possible rate of 3.5%.

Article 3 Application and Publication Competent authorities shall publish the applied CCyB rate at least annually. The buffer applies to all relevant exposures, including off-balance sheet items and derivatives.

Article 4 Transitional Arrangements Institutions shall apply the CCyB gradually over a three-year transition period starting from 1 January 2025. Existing buffers shall be harmonized with the new methodology.

Article 5 Reporting Requirements Credit institutions shall report CCyB-related data to their national competent authorities on a quarterly basis. The EBA shall publish aggregated CCyB statistics annually.

Article 6 Entry into Force This Decision enters into force on the twentieth day following its publication in the Official Journal of the European Union.

Transitional Provisions (Annex) The transitional arrangements detailed in the Annex shall apply to all credit institutions subject to this Decision. Institutions may opt for early application of the full CCyB rate.

Annex Detailed transitional schedules and calculation examples for the positive cycle-neutral CCyB are provided in the Annex.