On 2 September 2013, the EBA issued a consultation paper related
to the calculation of the Counter Cyclical Buffer (CCB) for banks
operating in more than one jurisdiction.
CRD IV requires firms to retain a countercyclical capital buffer
of between 0 and 2.5% depending on the country and the individual
institution.
For cross-border banks, the buffer rate will be a weighted
average of the rates in the different countries.
Public authorities within each Member State will be responsible
for setting the CCB rate within that Member State on a quarterly
basis, which will be based on credit growth in relation to GDP and
other relevant variables.
To establish their exact institution-specific buffer rate, banks
must therefore assess the proportion of their exposures in each
jurisdiction. Individual institutions will need to calculate their
buffers according to the countries in their whole cross-border
credit portfolio by using a combination of the rates in each
country.
