Regulatory Alerts2022-02-16 | General Administrative Act governing the rate for the domestic countercyclical capital buffer under section 10d of the KWGGeneral Administrative Act on the Domestic Countercyclical Capital Buffer Rate Under Section 10d of the KWG
The Federal Financial Supervisory Authority (BaFin) has increased the domestic countercyclical capital buffer rate to 0.75 percent of total risk exposure, effective 1 February 2022. This General Administrative Act applies to credit institutions and holding groups, mandating that they calculate institution-specific buffers using the new rate by February 2023 to enhance resilience against cyclical systemic risk. BaFin justified the increase based on widening credit-to-GDP gaps and sustained lending growth, enabling banks to conserve capital during the ongoing economic recovery for future financial stress periods.
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