On Mar. 8, ITA CB consulted on capital reserve against systemic risk.
ITA CB issued a consultation regarding a proposal to implement capital reserve against systemic risk (systemic risk buffer, SyRB) for banks/banking groups operating in Italy.
Equal to 1% of exposures domestic ones weighted for credit and counterparty risk.
SyRB
Target buffer of 1% would be achieved gradually: banks would be required to set up a reserve equal to 0.5% by Dec. 31, 2024; the remaining 0.5% by Jun. 30, 2025.
Activation of the SyRB, a capital reserve mandated by European law, that is aimed to bolster the resilience of the Italian banking system during adverse events.
Activating the reserve would incur minimal costs in the current macroeconomic setting.
Effectiveness
Responses to the consultation can be submitted by Mar. 29, 2024.
Apr. 2024 Update
On Apr. 26, 2024, ITA CB issued report on the consultation closed on Mar. 29, 2024.
Includes reference to 4 entities' comments received and addresses them one by one.
Activation of SyRB equal to 1.0% of weighted exposures for credit and counterparty risk towards Italian residents was decided, will apply to all banks authorized in Italy.
The target rate of 1.0% must be achieved gradually by establishing a reserve equal to 0.5% of relevant exposures by Dec. 31, 2024 and remaining 0.5% by Jun. 30, 2025.
Must be calculated on sum of exposures to residents in Italy referred to in rows 170, column 90 of the Corep table C09.01 and 150, column 125 of the Corep table C09.02.
Applies at consolidated level for groups, individual level for banks not part of groups.
Creation of reserve will strengthen ability of the Italian banking system to deal with possible adverse events, even independent of the economic-financial cycle.
If these events occur, release of buffer will provide banks with useful resources to absorb losses and support supply of credit to economy; ITA CB will reassess level of reserve at least every 2 years, or sooner if circumstances require it; more details.
