Countercyclical capital buffer rate for Greece: Q2 2024

27/03/2024 - Press Releases

- The Bank of Greece shall keep the countercyclical capital buffer rate for Greece unchanged at "zero percent" (0%) in the second quarter of 2024, with effect from 1 April 2024.

- 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 second quarter of 2024, with effect from 1 April 2024. 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 (ESRB), 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 -34.3 percentage points in the third quarter of 2023.

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, residential and commercial real estate prices, external imbalances, the banking sector, and capital markets (see Table "Cyclical systemic risk indicators"). The analysis of additional indicators points to emerging cyclical systemic risks in certain areas, such as residential real estate prices and the current account. Overall, however, it confirms that there is no excessive credit growth in Greece and is consistent with maintaining the countercyclical capital buffer rate at 0% in the second quarter of 2024.

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.