Ministry of Finance and DNB make recommendations for a more consistent use of the Countercyclical Capital Buffer in Europe

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On 24 January 2024, the European Commission published its plans for the revision of the European macroprudential framework for banks. An important theme within this evaluation is the usability of capital buffers during a crisis. Against this background, the Ministry of Finance and DNB jointly make recommendations on the use of the Countercyclical Capital Buffer (CCyB).

Published: 10 January 2025

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The primary goal of the CCyB is to increase the resilience of banks when systemic risks build up, so that this buffer can be released when such risks materialize. This gives banks extra room in times of crises to absorb losses and to maintain lending. The Ministry of Finance and DNB advocate in a joint non-paper for more harmonization and consistency in the use of the CCyB between Member States. To this end, we see the need to further clarify the legal framework to better facilitate a positive CCyB in a standard risk environment. The proposed adjustments improve the usability of capital buffers during a crisis and lead to a more shock-resistant European banking sector and economy.

The recommendations are further explained in the joint non-paper.

Non-paper releasable capital and the CCyB

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