The Countercyclical Capital Buffer (CCyB) rate for the fourth quarter of 2020 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 fourth quarter of 2020.

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 second quarter of 2020 the liquidity needs of firms as a result of the pandemic, was also met by an increase in bank lending, which benefited from the expansion of public guarantees. Increased lending, together with an unprecedented decline in GDP, 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 unemployment rate was slowed by the exceptional use of social safety nets.