The Countercyclical Capital Buffer (CCyB) rate for the first quarter of 2020 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 2020. 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 -10 percentage points. Similar findings emerge from the analysis of the total credit-to-GDP gap;
• The Italian financial cycle remains weak. The growth rate of bank lending to households is stable while that to firms, already negative, 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, although it has declined in the last six months, still remains high, real property prices are still well below their long-term level.