Recommendation (FMSB/1/2026): guidance on applying the countercyclical capital buffer

The latest recommendation of Austria’s Financial Market Stability Board (FMSB) to the Financial Market Authority (FMA), in line with Article 23a para. 1 Austrian Banking Act, is to leave the countercyclical capital buffer (CCyB) unchanged at a rate of 0% of risk-weighted assets.

As of 31 December 2025, three indicators pointed to cyclical risks, two of which of the banks dimension – excess capital and liquidity buffer quality. Both excess capital and highly liquid assets remain at solid levels in the entire banking system. The financial market stress indicator also pointed to an increase in cyclical risk factors as of 31 December 2025. Following the war in the Middle East, however, the indicator has risen again and therefore no longer stands out as a countercyclical leading indicator. The two gap indicators (standard and new business), in contrast, were below their thresholds. Economic growth has remained modest, and new lending has remained at a stable level since March 2025. Overall, these developments do not indicate imminent cyclical risks as of 31 December 2025.

However, market turbulences resulting from the war in the Middle East are increasing macroeconomic uncertainty. They are expected to weigh on economic growth and may exacerbate both inflation and interest rate risks.

Given high insolvency rates, weaker growth prospects and the geopolitical uncertainties mentioned above, it would be advisable for banks to make additional risk provisions.

An interactive version of the dashboard of systemic risk indicators is available on the OeNB website.