Question
How is the capital conservation buffer accounted for in the 2016 srep?

Answers

ECB Banking Supervision is taking a different approach in the 2016 Supervisory Review and Evaluation Process (SREP) regarding the capital conservation buffer (CCB). The CCB will no longer be included on a fully-loaded basis.
Some Member States (Cyprus, Estonia, Finland, Italy, Latvia, Lithuania, Luxembourg and Slovakia) decided to impose the full CCB on their banks without any phase-in as of 1 January 2016. Other Member States opted for a four-year phase-in. This difference led ECB Banking Supervision to set a SREP ratio based on a fully-loaded CCB for directly supervised institutions as part of the 2015 SREP. This decision has been revised for the 2016 SREP. Countries can take a deliberate choice, whether they want to apply tougher capital requirements or to adjust to the phase-in approach of many peers. Some countries, such as Portugal, have already changed their phase-in rules.
The CCB is part of the Basel III capital rules and is designed to ensure that banks build up capital buffers which can be drawn down as losses are incurred. The CCB is to reach 2.5% of the risk-weighted assets as of 1 January 2019 at the latest.   Your Comment






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