Countercyclical Capital Buffer (CCyB)

The Countercyclical Capital Buffer (CCyB) is a key macro-prudential instrument of the Basel III framework designed to counter the pro-cyclicality of the financial system. The CCyB is introduced into EU law by the Capital Requirements Directive (CRD) (2013/36/EU) and by the Capital Requirements Regulation (CRR) (575/2013), both of which came into effect on 1 January 2014. Two regulatory sources determine the CCyB regime in Luxembourg: the Law of 5 April 1993 on the financial sector (LFS) transposing the CRD, and, the Law of 1 April 2015 establishing a Comité du Risque Systémique (CdRS Law). Article 59-7 of the LFS provides that the CSSF is responsible for setting the countercyclical buffer rate applicable in Luxembourg. As such, the CSSF, as designated authority shall take the decisions after consultation with the Banque centrale du Luxembourg (BcL) and by taking into account the recommendations of the Comité du Risque Systémique (CdRS). CSSF Regulation N° 15-05 exempts small and medium-sized investment firms from the application of the CCyB. In accordance with the recommendation of the European Systemic Risk Board (ESRB) (ESRB/2014/1), the CSSF calculates a quarterly guide for the capital buffer, intended to guide the judgment on the adequacy of the countercyclical buffer rate. This guide reflects the credit cycle and the risks associated with excessive credit growth in Luxembourg and takes due account of the specificities of the Luxembourg economy. It is based on the deviation of the credit-to-GDP ratio from its long-term trend. The countercyclical buffer rate is set based on a “guided discretion”-approach, whereby the CdRS for its recommendation takes into account a set of data when it assesses the level of systemic risk and sets the buffer rate accordingly.

 

 

* CSSF Regulation N° 19-01 of 29 March 2019 (only in French)

on the setting of the countercyclical buffer rate for the second quarter of 2019


* CSSF Regulation N° 18-07 (only in French)

on the setting of the countercyclical buffer rate for the first quarter of 2019


* CSSF Regulation N° 18-05 (only in French)

on the setting of the countercyclical buffer rate for the fourth quarter of 2018


* CSSF Regulation N° 18-04 (only in French)

on the setting of the countercyclical buffer rate for the third quarter of 2018


* CSSF Regulation N° 18-01 (only in French)

on the setting of the countercyclical buffer rate for the second quarter of 2018


* CSSF Regulation N° 17-05 (only in French)

on the setting of the countercyclical buffer rate for the first quarter of 2018


* CSSF Regulation N° 17-03 (only in French)

on the setting of the countercyclical buffer rate for the fourth quarter of 2017


* CSSF Regulation N° 17-02 (only in French)

on the setting of the countercyclical buffer rate for the third quarter of 2017


* CSSF Regulation N° 17-01

on the setting of the countercyclical buffer rate for the second quarter of 2017


* CSSF Regulation N° 16-15

on the setting of the countercyclical buffer rate for the first quarter of 2017


* CSSF Regulation N° 16-05

on the setting of the countercyclical buffer rate for the fourth quarter of 2016


* CSSF Regulation N° 16-03 (only in French)

on the setting of the countercyclical buffer rate for the third quarter of 2016


* CSSF Regulation N° 16-02 (only in French)

on the setting of the countercyclical buffer rate for the second quarter of 2016


* CSSF Regulation N° 15-05

on the exemption of investment firms qualifying as small and medium-sized enterprises from the requirements to maintain a countercyclical capital buffer and a capital conservation buffer


* CSSF Regulation N° 15-04

on the setting of a countercyclical buffer rate


* CSSF Regulation N° 15-01

on the calculation of institution-specific countercyclical capital buffer rates, transposing Article 140 of Directive 2013/36/EU