Basel Committee: Guiding principles to operationalize a sectoral countercyclical capital buffer

British Columbia - Image by ArtTower from Pixabay

The Basel Committee on Banking Supervision has published guiding principles to operationalize a sectoral countercyclical capital buffer (SCCyB). 

The SCCyB is a tool that can be used to complement the Basel III countercyclical capital buffer

While a bank’s additional capital requirements following the activation of the CCyB depend on total risk-weighted assets, the SCCyB allows national authorities to temporarily impose additional capital requirements that directly address the build-up of risks in a specific sector.

The Committee notes that the guiding principles are intended to support the implementation of a SCCyB on a consistent basis across jurisdictions. 

Photo Credit: Pixabay

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s