{"id":4593,"date":"2016-04-22T14:31:26","date_gmt":"2016-04-22T12:31:26","guid":{"rendered":"https:\/\/www.fma.gv.at\/en\/?page_id=4593"},"modified":"2026-05-04T17:18:16","modified_gmt":"2026-05-04T15:18:16","slug":"details-countercyclical-capital-buffer","status":"publish","type":"page","link":"https:\/\/www.fma.gv.at\/en\/banks\/macroprudential-supervision\/details-countercyclical-capital-buffer\/","title":{"rendered":"Details about the Countercyclical Capital Buffer (CCyB)"},"content":{"rendered":"

The purpose of the countercyclical capital buffer is to counteract procyclicality in the financial system. Its objective is to smooth out the financial cycle, with banks accumulating additional capital under the CCyB where cyclical systemic risks<\/strong> are assessed to be increasing to create buffers that strengthen the resilience of the banking sector in times of recession (economic downturn, materialisation of losses from lending, crises). By reducing the countercyclical capital buffer in economically more difficult times, capital is released in the banking sector and thereby counteracts a tightening in the supply of credit, which is intended to have a dampening effect on the downturn. The CCyB may also contribute to reducing non-sustainable credit growth during the upturn phase of a financial struggle, which in turn counteracts the formation of investment bubbles.  The CCyB therefore strengthens financial market stability in two different ways: firstly by strengthening banks’ resilience, and secondly by reducing the risk factors where they are still accumulating.<\/p>

The assessment about whether cyclical systemic risks exist are conducted on a quarterly basis by the Financial Market Stability Board (FMSG) as well as the FMA. Such assessments always occur based on an analysis by the OeNB.<\/p>

To date, this assessment has been based on the calculated credit-to-GDP gap, which corresponds to the requirements of the ESRB’s Recommendation B (Recommendation ESRB\/2014\/1<\/a>). The credit-to-GDP gap is calculated as the deviation of the ratio of the credit and GDP volume from this ratio’s long-term trend.<\/p>

Since analyses had shown in the past that the credit-to-GDP gap was not optimal for identifying cyclical systemic risks, the OeNB developed a new methodology, which was approved by the FMSG at its 45th meeting on 04 June 2025. The new methodology continues to follow the ESRB Recommendation (Recommendation ESRB\/2014\/1<\/a>). The assessment of whether cyclical systemic risks exist has been conducted using the new methodology since October 2025.<\/p>

New methodology for identifying cyclical systemic risks<\/h2>

The new methodology<\/strong> is also in line with the requirements set out in the ESRB Recommendation (ESRB\/2014\/1), but also weights other variables in addition to the credit-to-GDP gap that is required to be considered (cf. Article 23a paras. 7 to 8 BWG). A total of 16 variables cover the five following dimensions:<\/p>

    \n
  1. Banks<\/li>\n\n\n\n
  2. Private Sector<\/li>\n\n\n\n
  3. Macroeconomics \/ economy<\/li>\n\n\n\n
  4. Financial Market and<\/li>\n\n\n\n
  5. Gap (Credit-to GDP gap)<\/li>\n<\/ol>

    Detailed information about the new methodology and the individual variables<\/a> and their current manifestations can be found on the OeNB Website<\/a> (in German only). <\/p>

    Further information about the calculation of the credit-to-GDP gap can be found on the websites of the Basel Committee<\/a> as well as the ESRB (Recommendation ESRB\/2014\/1<\/a>). <\/p>

    Combined buffer requirement<\/h2>

    In the event that the credit institution fails to meet the combined capital buffer requirement (see Article 22a 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).<\/p>

    The combined capital buffer requirement consists of the entire Common Equity Tier 1 capital needed to fulfil the Capital Conservation Buffer requirements (Article 22 BWG), the Countercyclical Capital Buffer, all (sectoral) systemic risk buffers, the buffer for Systemically Important Institutions and the buffer for Global Systemically Important Institutions (current does not apply in Austria).<\/p>

    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:<\/h2>