On 14 April 2020, the European Central Bank (ECB) updated its web page concerning the measures taken by macro-prudential authorities in euro area countries since 11 March 2020.
Key points in the updated web page include:
- Countercyclical capital buffer (CCyB) – Among the seven euro area countries with positive rates, authorities in France, Ireland and Lithuania reduced the CCyB to 0% and those in Belgium and Germany revoked the previously announced CCyB activations. These adjustments reduce requirements for all banks with exposures to these countries. This is due to existing reciprocity arrangements which require banks from other jurisdictions to apply the same capital requirement to their exposures in the country applying the CCyB. In turn, euro area banks have seen their requirements reduced by the CCyB reductions in Denmark, Hong Kong, Iceland, Norway, Sweden, and the United Kingdom.
- Systemic risk buffer (SyRB) – The authorities in Estonia and Finland dropped the SyRB to 0% while the authority in the Netherlands reduced the existing 3% SyRB for three institutions.
- Other Systemically Important Institution (O-SII) buffer – In combination with the reductions in the SyRB, Finland and the Netherlands have also lowered the O-SII buffer for one bank each. These reductions prevent the O-SII buffers from limiting the reductions in the SyRB, given the interactions between the two requirements stipulated in Article 131 of the Capital Requirements Directive IV. For the institutions in Finland it ensures that the combined structural buffers (SyRB and O-SII buffers) are effectively reduced by 1% of risk weighted assets.
- Postponing the phase-in or introduction of announced measures – Cyprus announced that it will delay the phase-in of O-SII buffers by one year, while the Netherlands postponed the introduction of capital surcharges on domestic mortgage loan exposures under Article 458 of the Capital Requirements Regulation.