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Countercyclical capital buffer rate for Greece: Q4 2022

28/09/2022 - Press Releases

- The Bank of Greece shall keep the countercyclical capital buffer rate for Greece unchanged at “zero percent” (0%) in the fourth quarter of 2022, with effect from 1 October 2022.

- The buffer guide, as set out in Recommendation ESRB/2014/1, is “zero”, as the standardised credit-to-GDP gap remains negative.

- Maintaining the current rate is also justified by the assessment of additional indicators for monitoring the build-up of cyclical systemic risk.

The Bank of Greece shall keep the countercyclical capital buffer rate for Greece unchanged at “zero percent” (0%) in the fourth quarter of 2022, with effect from 1 October 2022. This rate was set for the first time in the first quarter of 2016 and has since remained zero.

According to Executive Committee Act 202/1/11.03.2022, which lays down the procedure for applying the countercyclical capital buffer rate in Greece and the relevant calibration methodology, the Bank of Greece assesses, on a quarterly basis, the intensity of cyclical systemic risk and the appropriateness of the countercyclical capital buffer rate, taking into account the standardised credit-to-GDP gap, the buffer guide and, in particular, additional indicators for monitoring the build-up of cyclical systemic risk.

The buffer guide, as set out in Recommendation ESRB/2014/1 of the European Systemic Risk Board, is “zero”, as the standardised credit-to-GDP gap has remained negative since the third quarter of 2012 and, based on the latest available data, stood at -21.0 percentage points in the first quarter of 2022.

The Bank of Greece is also examining a number of additional indicators, in order to monitor the build-up of cyclical systemic risk, relating to credit developments, private sector indebtedness, potential overvaluation of property prices, the soundness of credit institutions, external imbalances and the pricing of risk. The analysis of additional indicators confirms that there is no excessive credit growth in Greece, and is in line with maintaining the countercyclical capital buffer rate at 0% in the fourth quarter of 2022.

More information:
The countercyclical capital buffer is a macroprudential policy tool aimed at preventing the build-up of cyclical systemic risks and at providing an appropriate level of credit growth and leverage, both in the upward and downward phases of the economic cycle.

More information on macroprudential policy can be found here.

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