The Countercyclical Capital Buffer (CCyB) rate for the second quarter of 2018 has been set at zero per cent

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Summary

Based on the analysis of the reference indicators the Bank of Italy has decided to keep the countercyclical capital buffer rate at zero for the second quarter of 2018. Specifically:

  • In the fourth quarter of 2017 the deviation of the credit-to-GDP ratio from its long-term trend (the credit-to-GDP gap), calculated using the standard methodology set by the Basel Committee on Banking Supervision, was -14 percentage points. According to the methodology developed by the Bank of Italy, which takes into account the specific features of Italy's credit cycle, the gap was about -10 percentage points. Similar findings emerged from the analysis of the total credit-to-GDP gap for the third quarter of 2017 (the last quarter for which data are available).
  • The Italian economy's macro-financial conditions, although recovering, remain generally weak. The unemployment rate has decreased, but remains at a high level. Growth in bank credit to the private sector is positive, however, the rate of growth for business lending continues to be close to zero. The stock of non-performing loans (both gross and net of write-downs) in proportion to the total is decreasing but remains high. Real property prices have stabilized but are still well below their long-term level.