CNB keeps interest rates unchanged
The CNB Bank Board today left the countercyclical capital buffer rate for exposures located in the Czech Republic at 2.00%.
The CNB set this rate at a non-zero level for the first time at the end of 2015. The latest change in the rate occurred on 23 May 2019, when the Bank Board increased it to 2.00% with effect from 1 July 2020.
The countercyclical capital buffer was introduced as an important macroprudential policy instrument in the European Union in 2014. Obliged institutions are required to create this buffer on the basis of the regulator’s instructions in periods of excessive growth in lending. Excessive lending growth usually increases financial imbalances and leads to a rise in systemic risk. By contrast, at times of falling economic activity, accompanied by rising credit losses, this buffer should be released so that non-financial corporations and households continue to have access to loans without excessively tight conditions.
More details on this decision are available in the Provision of a general nature on setting the countercyclical capital buffer rate for the Czech Republic III/2019, which will be published on 6 September 2019.
Source: Czech National Bank
Your email address will not be published. Required fields are marked *
Current ye@r *
Leave this field empty
© 2019 Eurologport