Regulatory Alerts2014-06-18
Added · Updated
Recommendation of the European Systemic Risk Board on guidance for setting countercyclical buffer rates
Designated authorities and the European Central Bank are guided to use the credit-to-GDP gap as a common starting point for setting countercyclical capital buffer rates, while exercising discretion based on additional quantitative and qualitative indicators. Authorities must publish quarterly buffer guides, explain their decision-making processes, and generally recognize buffer rates set by other Member States. The guidance specifies methodologies for calculating the credit-to-GDP gap and benchmark rates, and outlines principles for the prompt release of buffers when risks materialize.
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