Cyprus central bank keeps countercyclical capital buffer at 1.5%
Nicosia, Cyprus. The Central Bank of Cyprus (CBC) confirmed that the countercyclical capital buffer rate for credit institutions will remain at 1.5 per cent to safeguard the stability of the national financial system. The decision follows the CBC’s latest assessment of market conditions.
Decision under macroprudential law
The CBC said the decision was made in accordance with the provisions of the Macroprudential Oversight of Institutions Laws of 2015 to 2022. The regulator deemed it appropriate to maintain the current rate based on its latest assessment of market conditions.
Purpose of the buffer
The countercyclical buffer is a macroprudential tool used by regulators to ensure that banks accumulate sufficient capital during periods of economic growth. By maintaining this requirement, the authorities aim to protect the banking sector against potential future systemic risks and cyclical fluctuations.
Effective date and scope
The existing rate of 1.5 per cent has been effective as from January 14, 2026, and will continue to apply to all relevant institutions.
How do you think maintaining the 1.5 per cent buffer will affect banks’ resilience to future shocks?
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