Although new lending is increasing, year-on-year growth in bank credit to both the household and non-financial corporate sectors remains negative. Against this background, the countercyclical capital buffer (CCyB) rate on banks’ Irish exposures is maintained at zero per cent. The countercyclical capital buffer (CCyB) is a time varying capital requirement which applies to inscope banks and investment firms.
It is designed to make the banking system more resilient and less pro-cyclical. Essentially the CCyB will increase the capital requirement of banks if we see credit growth becoming “excessive". It can then be released, partially or fully, either in the case of a period of systemic stress or when credit growth and associated systemic risks recede.