The Countercyclical Capital Buffer (CCyB) rate for the third 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 third quarter of 2021.

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

In the first quarter of 2021, the liquidity needs of firms as a result of the pandemic were met primarily by an increase in bank lending, which benefited from public guarantees. In the same period, GDP decreased again, though to a lesser degree than in the previous quarter. These trends led to an increase in the total credit-to-GDP ratio, whose deviation from the long-term trend (credit-to-GDP gap) remained positive, if calculated based on the model developed by the Bank of Italy.

The other indicators used to assess macroeconomic and financial conditions were also influenced by the measures taken by the Italian government to combat the crisis. The NPL ratio in relation to firms decreased slightly, continuing to be positively influenced by the moratorium measures, while it increased in relation to households; the rise in the unemployment rate has been slowed by widespread recourse to social safety nets and the continuing freeze on layoffs; real property prices remained virtually unchanged.