Countercyclical buffer and Logarithm: Difference between pages

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1.


A macroprudential [[capital adequacy]] requirement for a capital cushion to allow and compensate for procyclical effects.  
The mathematical function which is the inverse of "raising to the power of".


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




The idea is that the buffer is:
'''Example'''
*Built up during times when economic conditions are favourable; and
*Reduced during a downturn, to free up capital.


Working with logarithms to the base 10:


The rate initially set by the UK's Financial Policy Committee (FPC) for the UK exposures of institutions incorporated in the UK was 0%.
log<sub>10</sub>(100) = 2


And 10<sup>2</sup> = 100


Sometimes written 'CounterCyclical Buffer'.
 
 
More generally with logarithms to the base n:
 
log<sub>n</sub>(x) = the power which, when 'n' is raised to it = x
 
 
'''Example'''
 
10<sup>(log<sub>10</sub>(x))</sup> = x
 
And, more generally:
 
n<sup>(log<sub>n</sub>(x))</sup> = x
 
 
2.
 
The logarithm to the base 10.




== See also ==
== See also ==
* [[Basel III]]
* [[Natural logarithm]]
* [[Capital buffer]]
* [[Capital Conservation Buffer]]
* [[Financial Policy Committee]]
* [[Procyclical]]
* [[Countercyclical]]
* [[Macroprudential]]
* [[Total Loss Absorbing Capacity]]

Revision as of 20:20, 15 January 2016

1.

The mathematical function which is the inverse of "raising to the power of".

Usually abbreviated to "log".


Example

Working with logarithms to the base 10:

log10(100) = 2

And 102 = 100


More generally with logarithms to the base n:

logn(x) = the power which, when 'n' is raised to it = x


Example

10(log10(x)) = x

And, more generally:

n(logn(x)) = x


2.

The logarithm to the base 10.


See also