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Press release of the Banco de Portugal on the countercyclical capital buffer – 4th quarter of 2020

The countercyclical buffer rate to be applied as of 1 October will remain at 0% of the total risk exposure amount.

This decision was made by deliberation of the Board of Directors on 22 September 2020, having notified the European Central Bank, which did not object to Banco de Portugal’s proposal, and following consultation of the National Council of Financial Supervisors.

The countercyclical buffer rate applies to all credit risk exposures where the counterparty is the domestic private non-financial sector of credit institutions and investment firms in Portugal subject to the supervision of the Banco de Portugal or the European Central Bank (Single Supervisory Mechanism), as is reviewed quarterly. The website also contains information on the countercyclical buffer rates applicable to exposures to European Union/European Economic Area Member States.

In view of the crisis triggered by the COVID-19 pandemic and in line with the recommendation of the European Systemic Risk Board on the operalisation of the countercyclical capital buffer, the Banco de Portugal reviewed the analytical framework underlying the application of the countercyclical capital buffer in Portugal, by adding an additional set of indicators. These indicators are presented in the new methodological document “The countercyclical capital buffer in Portugal”.

The countercyclical buffer rate is published on the Banco de Portugal’s website, jointly with the analysis underlying the decision and the methodological document. The indicators will also be made available in each quarterly publication of the decision on the countercyclical buffer rate.