Capital Conservation Buffer: Difference between revisions
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The Capital Conservation Buffer is a macroprudential [[capital adequacy]] requirement for all banks to build up an additional loss-absorbing capital cushion to improve their resilience to stresses. | The Capital Conservation Buffer is a macroprudential [[capital adequacy]] requirement for all banks to build up an additional loss-absorbing capital cushion to improve their resilience to stresses. | ||
The idea is for banks to build up the loss-absorbing cushions outside periods of stress, to be drawn down if losses are incurred in the future. | |||
Under Basel III the CCB is 2.5% of risk weighted assets. | Under Basel III the CCB is 2.5% of risk weighted assets. | ||
Revision as of 13:52, 29 October 2016
(CCB).
The Capital Conservation Buffer is a macroprudential capital adequacy requirement for all banks to build up an additional loss-absorbing capital cushion to improve their resilience to stresses.
The idea is for banks to build up the loss-absorbing cushions outside periods of stress, to be drawn down if losses are incurred in the future.
Under Basel III the CCB is 2.5% of risk weighted assets.
The CCB is subject to a 3-year phase in period from 1 January 2016 to 1 January 2019.
