Countercyclical buffer: Difference between revisions

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imported>Doug Williamson
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imported>Doug Williamson
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A [[capital adequacy]] requirement for a capital cushion to allow and compensate for procyclical effects.  
(CCyB).
 
A macroprudential [[capital adequacy]] requirement for a capital cushion to allow and compensate for procyclical effects.  
 
Countercyclical buffers are imposed under Basel III within a range of 0% to 2.5%, subject to national supervisors' determinations.
 
 
The idea is that the buffer is:
*Built up during times when economic conditions are favourable; and
*Reduced during a downturn, to free up capital.
 
 
The rate initially set by the UK's Financial Policy Committee (FPC) for the UK exposures of institutions incorporated in the UK was 0%.
 
 
Sometimes written 'CounterCyclical Buffer'.
 


== See also ==
== See also ==
* [[Basel III]]
* [[Capital buffer]]
* [[Capital Conservation Buffer]]
* [[Financial Policy Committee]]
* [[Procyclical]]
* [[Procyclical]]
* [[Countercyclical]]
* [[Countercyclical]]
* [[Macroprudential]]
* [[Total Loss Absorbing Capacity]]
* [[Total Loss Absorbing Capacity]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Manage_risks]]

Latest revision as of 16:08, 24 March 2020

(CCyB).

A macroprudential capital adequacy requirement for a capital cushion to allow and compensate for procyclical effects.

Countercyclical buffers are imposed under Basel III within a range of 0% to 2.5%, subject to national supervisors' determinations.


The idea is that the buffer is:

  • Built up during times when economic conditions are favourable; and
  • Reduced during a downturn, to free up capital.


The rate initially set by the UK's Financial Policy Committee (FPC) for the UK exposures of institutions incorporated in the UK was 0%.


Sometimes written 'CounterCyclical Buffer'.


See also