QA2018-87 - Own Funds Requirements T02.00

Owned by SRB Services
Feb 01, 2024
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QA2018-87

Question


r420: The concept of the Countercyclical Capital Buffer requires a phase-in (cap) of the Institution-Specific Countercyclical Capital Buffer. A phase-in of the country specific Countercyclical Capital Buffer rate is not covered by the original Basel text nor the CRD. Hence, we see no legal basis for any other phase-in definition, like provided with this draft guidance on the 2018 LDT. To avoid any misunderstanding or wrong interpretation of article 130 of the CRD we kindly ask to delete the amendment "The fully loaded amount should correspond to the buffer rates officially communicated to the ESRB by the competent authority, applied to the relevant exposures and risk exposure amounts as at the reporting date."


Response


The CRD does allow flexibility in the setting of the CCyB by national authorities. As such the fully loaded targets and transitional targets are to be communicated to the ESRB and can be found on their website. https://www.esrb.europa.eu/national_policy/ccb/applicable/html/index.en.html Thus, the phase-in should entail application of the CCyB that is applicable at the reporting date and the fully loaded figure shall be the final and ultimate target set by each authority.