The Countercyclical Capital Buffer (CCyB) rate for the fourth quarter of 2019 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 fourth quarter of 2019. Specifically:

  • In the second quarter of 2019 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 about -16 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 emerge from the analysis of the total credit-to-GDP gap.
  • The Italian financial cycle remains weak. Bank credit to households is slowing down while that to firms is decreasing. Although the stock of non-performing loans in proportion to the total is falling sharply, it remains high for firms. The real sector indicators connected with developments in macroeconomic-financial conditions are sending similar signals: the unemployment rate is declining but still remains high, real property prices have decreased further but are still well below their long-term level.