Countercyclical buffer

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Revision as of 14:47, 11 November 2016 by imported>Doug Williamson (Expand.)
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(CCyB).

Sometimes written 'CounterCyclical Buffer'.

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%.


See also