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Central Bank maintains counter cyclical capital buffer to 0%

24/02/2021 15:59

The Central Bank of Cyprus (CBC) has set the countercyclical capital buffer for the period 1 April 2021 – 30 June 2021 at 0% of the total risk exposure amount for every licensed credit institution and every investment firm that provides the investment services of dealing on own account or underwriting of financial instruments and / or placing of financial instruments on a firm commitment basis.

In a press release the CBC says that based on the time series ending on 30 September 2020 the gap between the credit-to-GDP ratio and its long term trend (credit-to-GDP gap) based on the broad credit definition is -61.35%, whereas the gap between the credit-to-GDP ratio and its long term trend (credit-to-GDP gap) based on the narrow (bank) credit definition is -69.5%.
 
“Given that the credit-to-GDP gap is lower than 2 percentage points and taking into account the additional indicators that were assessed by the CBC, the benchmark buffer guide is 0% and the CCyB rate has been set at 0%,” the CBC added.