The capital conservation buffer is aimed at accommodating unexpected losses arising from a potentially adverse scenario, making it possible for institutions to maintain a stable flow of funding to the real economy.

Section II of title VII-A of the Legal Framework of Credit Institutions and Financial Companies establishes that this buffer requirement must be made up of Common Equity Tier 1. After a phasing-in period started in 2016, this requirement has been set, since 2019, at a rate of 2.5% of the total risk exposure amount, applied on a consolidated, sub-consolidated or individual basis, as applicable. 

Related documents

Notice of Banco de Portugal No. 6/2016

Any further information can be obtained through email: info@bportugal.pt