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
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