The Countercyclical Capital Buffer (CCyB) rate for the first quarter of 2016 has been set at zero per cent

Summary

Article 136 of Directive 2013/36/EU (Capital Requirements Directive, CRD IV) requires the designated national authorities to adopt a framework for setting the Countercyclical Capital Buffer (CCyB) rate as of 1 January 2016. The rate will be reviewed quarterly. The European directive was enacted in Italy by Bank of Italy Circular No. 285/2013 'Supervisory Instructions for Banks', containing specific rules on the CCyB. Legislative Decree 72/2015 nominates the Bank of Italy as the authority designated to adopt macro-prudential measures in the banking sector, including the CCyB. The rules apply to banks and investment firms at the individual and the consolidated level.

Based on an analysis of the reference indicators the Bank of Italy has decided to set the countercyclical buffer rate (for exposures to Italian counterparties) for the first quarter of 2016 at zero per cent. Specifically:

• At the end of the second quarter of 2015 (the last for which full information is available) the deviation of the total-credit-to-GDP ratio from its long-term trend (the credit-to-GDP gap), calculated using the standard methodology, was about -10 percentage points. According to the model developed by the Bank of Italy, which takes account of the specificities of Italy's financial cycle, the gap is about -8 points. Similar information comes from the analysis of only bank credit. The values of the indicators at the end of June 2015 are presented in the table on the following page.
• Although the Italian economy's macro-financial conditions are improving, they remain generally weak. The unemployment rate has been falling in recent months but it is still higher than in the past. During the summer, the growth in bank credit to the private sector was still virtually nil, despite a steady improvement. Real property prices are no longer falling but they remain well below their long-term level.