Regulatory Alerts2016-01-04
Applicability of Countercyclical Capital Buffer (CCyB) in Saudi Arabia
The Saudi Arabian Monetary Agency (SAMA) is implementing the Countercyclical Capital Buffer (CCyB) for all banks in Saudi Arabia, effective January 1, 2016. This buffer, ranging from 0% to 2.5% of total risk-weighted assets, requires banks to calculate a weighted average based on credit exposures in various jurisdictions, using published Basel Committee rates or a 2.5% maximum where no rate exists. SAMA has set Saudi Arabia's CCyB rate at 0% for 2016 and will pre-announce future changes at least one year in advance, with banks also needing SAMA's permission for dividend distributions considering CCyB.
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