The Countercyclical Capital Buffer (CCyB) rate for the first quarter of 2017 has been set at zero per cent

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 first quarter of 2017.¹ Specifically:

• In the third quarter of 2016 the deviation of the bank-credit-to-GDP ratio from its long-term trend (the credit-to-GDP gap), calculated using the standard methodology, was about -9 percentage points, widening with respect to the previous quarter. According to the methodology developed by the Bank of Italy, which takes into account the specificities of Italy's credit cycle, the gap was about -7 points. There are similar findings from the analysis of the total-credit-to-GDP gap for the second quarter of 2016 (the last quarter for which data are available).
• Although the Italian economy's macro-financial conditions are improving, thanks to the ongoing economic recovery, they remain generally weak. The unemployment rate has been almost unchanged over the last few months and remains at a historically high level. Growth in bank credit to the private sector is slightly positive but business lending continues to be close to zero. Though declining slightly, the stock of non-performing loans (gross of provisions) in proportion to the total remains high. Real property prices are still well below their long-term level.