14 EU countries will raise their banks’ CCyB in 2020

Spanish banks credit lending

Banca March | By 2020, 14 countries of the European Union and the Eurozone will ask their banks to raise their capital buffers, in order to cushion future financial shocks.

Although Christine Lagarde explained after the ECB’s last meeting that the intensity of the economic slowdown had eased, a group of states has decided to activate or raise their anti-cyclical capital buffers. This is a macro-prudential tool, which emerged after the 2008 crisis, whereby the authorities of a country ask their financial institutions to accumulate more capital when it is considered that the cyclical systemic risk is increasing.

There are currently 11 countries that have set a capital buffer above 0%, of which 7 have decided to raise it. Activation in 3 other countries will mean that 14 of the 31 states will have this tool activated. For its part, the Bank of Spain has decided not to activate this measure, maintaining its level of demand to Spanish entities at 0%.