The Countercyclical Capital Buffer (CCyB) rate for the first quarter of 2021 has been set at zero per cent

Summary

The Bank of Italy has decided to keep the countercyclical capital buffer rate at zero per cent for the first quarter of 2021.

The exceptionally severe crisis that hit the Italian and the global economy made it necessary for the authorities to adopt measures to encourage the flow of lending and liquidity to the real economy.

In the third quarter of 2020 the liquidity needs of firms as a result of the pandemic were also met by an increase in bank lending, which benefited from the expansion of public guarantees. In the same period, GDP rebounded sharply, but remained below the level of the same quarter of last year. Such trends led to a reduction of the credit-to-GDP gap.

The other indicators used to assess macroeconomic and financial conditions have also been influenced by the measures taken by the Italian government to counter the effects of the crisis. The NPL ratio in relation to firms has been positively influenced by the moratorium measures and the increase in the unemployment rate has been slowed by the exceptional use of social safety nets.