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

• In the third 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 -11 percentage points. Similar findings emerged from an analysis of the total credit-to-GDP gap for the second quarter of 2018 (the last quarter for which data are available).

• The Italian economy's macro-financial conditions remain generally weak. The unemployment rate is decreasing, but it is still high. Bank credit to the private sector is growing; however, the rate of growth for business lending continues to be low. Although the stock of non-performing loans (both gross and net of write-downs) in proportion to the total is falling sharply, it remains high. Real property prices have begun to decrease again and are still well below their long-term level.