The Central Bank of Cyprus (CBC), in accordance with the methodology described in its macroprudential policy, did not deem necessary to adjust the CCyB rate for the period 1 July 2022 – 30 September 2022 and, therefore, the CCyB rate remains at 0% of the total risk exposure amount of each licensed credit institution in the Republic.
According to the CBC, based on the time series ending on 30 December 2021 the gap between the credit-to-GDP ratio and its long term trend (credit-to-GDP gap) based on the broad credit definition is -62,9 and the gap between the credit-to-GDP ratio and its long term trend (credit-to-GDP gap) based on the narrow (bank) credit definition is -54,3.
It adds that given that the credit-to-GDP gap is lower than 2 percentage points and taking into account the additional indicators that were assessed by the CBC, the benchmark buffer guide is 0% and the CCyB rate remains at 0%.
In addition to the credit-to-GDP gap, the CBC takes into account a range of quantitative and qualitative information in its assessment of system-wide risks associated with periods of excessive growth.
The additional indicators assessed by the CBC relate to: Non-financial private sector indebtedness; banking sector resilience; the real estate market; the real economy; and external imbalances. The summary table of indicators used by the CBC is set out in this file.
Additional information on the CCyB, which, since its introduction on 1 January 2016, has been set on a quarterly basis, is provided in this file.
Source: Cyprus News Agency