Capital conservation buffer
The capital conservation buffer aims to accommodate losses from a potential adverse scenario, allowing 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 requirement could be gradually implemented from 1 January 2016 onwards through the imposition of a buffer of 0.625% (of the total risk exposure amount) in 2016, 1.25% in 2017, 1.875% in 2018 and 2.5% in 2019. However, the designated authority may impose a shorter transitional period or even frontload the total buffer.
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