On May 31, NLD DNB raised CCyB to 2 per cent from May 31, 2024.
NLD DNB increased countercyclical capital buffer (CCyB) from 1.0% to 2.0%.
Increase announced alongside publication of Overview of Financial Stability (OFS).
Follows NLD DNB May 2023 briefing to NLD PRL on financial sector risks, see #172361.
Also follows NLD DNB Mar. 2023 said CCyB to be maintained at 1%, see #138916.
Scope
Requirement applies to Dutch and foreign banks with outstanding loans in Netherlands.
Means additional capital requirement of approximately EUR 3.4bn for banking system.
Cyclical Risks
CCyB applies to domestic exposures; mandatory reciprocity up to and including 2.5%.
Foreign banks with Netherlands exposures must also maintain capital of 2.0% CCyB.
CCyB intended to increase banks' resilience when cyclical risks build up, by giving banks capacity to absorb losses, supporting lending to businesses and consumers.
Can limit the direct impact of a crisis on the real economy.
Effectiveness
Banks must comply with requirement as of May 31, 2024.
In Jun. 2023 NLD DNB outlined financial system macroeconomic risks, see #175507.
Dec. 2023 CCyB Maintained at 2%
On Dec. 21, 2023, NLD DNB confirmed that it sees no reason to adjust its earlier CCyB decision, as the risk assessment has not materially changed since previous decision.
Mar. 2024 CCyB Unchanged at 2%
On Mar. 25, 2024, NLD DNB said no reason to amend previous CCyB decision.
Since previous CCyB announcement, risk environment has not changed substantially.
Banks with must comply with 2% CCyb requirement by May 31, 2024.
