Recommendation for the Enactment of the Countercyclical Capital Buffer (FMSG/3/2015)

Fourth meeting, June 1, 2015

The FMSB recommends the FMA to enact a 0% Countercyclical Capital Buffer for domestic credit institutions. This buffer is intended to protect the banking system against possible losses in conjunction with the emergence of a cyclical systemic risk and the associated adverse effects on the credit supply for the real economy.

The Credit-to-GDP gap, which is a significant indicator and which is currently negative, forms the basis for this decision. Consequently the benchmark for the Countercyclical Capital Buffer in accordance with the guidance of the Basel Committee on Banking Supervision (BCBS) is 0%. The FMSB will actively analyse the further development of cyclical risks and will issue a recommendation as required to increase the level of the buffer at a forthcoming meeting.