This would constrain their lending activities which in turn would have an adverse impact on economic recovery. Basel  BIS central bankers’ speeches  5  committee has, therefore, prescribed building up of countercyclical capital buffers.
Banks are expected to build capital buffers during the upturn which could be used during downturn so as to maintain their lending activities which would cushion the impact of a downturn on the economy. Basel Committee has suggested “credit to GDP” ratio as a metric to calibrate countercyclical capital buffers.