Range of practices in implementing a positive neutral countercyclical capital buffer

The Basel Committee on Banking Supervision has published a report which describes the range of practices in implementing a positive neutral countercyclical capital buffer (CCyB).

In 2017 the Committee published a range of practices in implementing the CCyB report which examined how jurisdictions have used the flexibility in the CCyB framework when designing their CCyB policies. Since then, an increasing number of jurisdictions have chosen to use this flexibility to introduce a positive CCyB when risks are judged to be neither subdued nor elevated. In 2022, the Committee published a newsletter, where it supported and acknowledged the benefits of authorities' ability to set a positive neutral rate for the CCyB.

This report builds on those prior publications by examining the different jurisdictional frameworks for implementing a positive neutral CCyB, the observed approaches to the calibration and operation of the buffer, and discusses reciprocity considerations.

The adoption of a positive neutral CCyB approach is not required by Committee members, and the report does not seek to discuss or opine on the merits or demerits of a positive neutral CCyB relative to other macroprudential measures or tools. Some jurisdictions may use tools other than the positive neutral CCyB to address similar risks based on their specific jurisdictional circumstances.