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Details about the Countercyclical Capital Buffer

The Countercyclical Capital Buffer is intended to ensure that the own funds requirements in the banking sector take into account the macroeconomic situation (economic/business cycle) in which the credit institutions are operating. The objective is to build up capital in economically favourable times (economic boom, robust economic situation) and simultaneously to have a dampening effect on non-sustainable credit growth, so that in economically less favourable times (economic downturn, recesssion) capital may again be released into the banking sector by reducing the Countercyclical Capital Buffer, thereby counteracting a tightening of the credit supply. This should therefore lead to the restraining of systemic risks arising from non-sustainable credit growth. The quarterly assessment of the credit cycle is conducted in accordance with the methodology of the Basel Committee on Banking Supervision (see the website of the Oesterreichische Nationalbank (OeNB) for further information). In the event that the credit institution fails to meet the combined capital buffer requirement (see Article 24b BWG), then this results in restrictions on distributions (see Article 24 BWG) and the obligation to prepare a capital conservation plan (see Article 24a BWG).

Further information about the calculation of the Credit-to-GDP gap can be found on the OeNB website (in German only).

Based on Article 23a para. 4 of the Austrian Banking Act (BWG; Bankwesengesetz), the Financial Market Authority hereby publishes the following information about the countercyclical capital buffer requirement:

  • In relation to Article 23a para. 4 no. 1 BWG:

    The countercyclical capital buffer rate to be applied for the countercyclical capital buffer for domestically-located relevant credit exposures is currently 0 %.
  • Regarding Article 23a para. 4 no. 2 BWG:

    The ratio between the volume of loans granted in Austria and the Gross Domestic Product (Credit-to-GDP ratio) is 145.26 (as of 09.2023) with its deviation from the long-term trend (Credit-to-GDP gap) -15.4 percentage points (as of 09.2023).
  • Regarding Article 23a para. 4 no. 3 BWG:

    The buffer guide is currently 0.
  • Regarding Article 23a para. 4 no. 4 BWG:

    Explanation of the countercyclical capital buffer rate set for domestically-located relevant credit exposures: The evaluation of the most recently available data shows a negative Credit-to-GDP gap of -15.4 percentage points as of September 2023 and is therefore below the critical threshold of 2 percentage points.
  • Regarding Article 23a para. 4 nos. 5 to 8 BWG:

    Currently not applicable.

Further information