On 28 November 2024, the Basel Committee on Banking Supervision (Basel Committee) published a report which describes the range of practices in implementing a positive neutral countercyclical capital buffer (CCyB).

In 2010, the Basel Committee published guidance that detailed the key requirements for operating the CCyB, and in 2017 it published a paper discussing the range of practices in implementing the CCyB, which examined how jurisdictions have used the flexibility in the CCyB framework when designing their CCyB policies. Since then, an increasing number of jurisdictions have chosen to use this flexibility to voluntarily introduce a positive neutral CCyB, i.e. a non-zero CCyB when risks are judged to be neither subdued nor elevated. In 2022, the Basel Committee published a newsletter in which it supported and acknowledged the benefits of authorities’ ability to set a positive neutral rate for the CCyB on a voluntary basis.

The report now published examines the observed range of practices adopted by jurisdictions which have chosen to implement a positive neutral CCyB although it does not discuss or opine on the merits or demerits of such practices.