The additional capital requirement may give rise to some increase in lending rates as a result of higher overall funding costs and may also reduce the supply of credit to housing at the margin, but is unlikely to have a major impact on the overall growth in housing credit. Table 1: Macro-prudential Instruments Counter-cyclical capital The CCB is part of the Basel III framework.
It requires an additional capital buffer (CCB) overlay to be applied, normally of up to 2.5 per cent of risk weighted assets. Higher capital holdings would increase the resilience of bank balance sheets to credit shocks. The CCB might also moderate the credit cycle via upward pressure on bank funding costs. Banks would be given up to 12 months to raise the extra capital.