Development of the solvency ratio
Situation as at 31 December 2017
In accordance with Article 5 of CSSF Regulation No 14-01 on the implementation of certain discretions of Regulation (EU) No 575/2013 and Article 92 of Regulation (EU) No 575/2013, the Luxembourg institutions and the branches of non-EU banks, if they are not subject to supervision by a foreign authority based on compliance with standards offering guarantees that are comparable to those in force in Luxembourg, are required to observe, since January 2014:
- a Common Equity Tier 1 capital ratio of 4.5%;
- a Tier 1 capital ratio of 6%; and
- a total capital ratio of 8%.
In addition, the CSSF having anticipated the implementation of the capital conservation buffer, the aforementioned institutions are required, under Article 6 of CSSF Regulation N° 14-01 to hold, from 1 January 2014, a capital conservation buffer (made up of Common Equity Tier 1) equal to 2.5% of the total amount of their risk exposure.
Pursuant to Article 1 of CSSF Regulation No 16-15 on the setting of the countercyclical buffer rate, the countercyclical buffer rate applicable to the relevant exposures located in Luxembourg is maintained at 0% for the 1st quarter of 2016.