31 January 2025

• 17 EEA countries have adopted a positive neutral CCyB approach
• Authorities using this approach do not expect it to result in higher CCyB requirements at the peak of the cycle
• The European macroprudential framework could be clarified to facilitate a more flexible and proactive use of the CCyB

A timely build-up of capital buffers that can be released in times of stress is essential for financial stability. One way to achieve this is by setting a positive countercyclical capital buffer (CCyB) rate early in the cycle when cyclical systemic risks are neither subdued nor elevated. Understanding how authorities can apply this “positive neutral” approach is essential to advancing the use of the CCyB.

The European Central Bank (ECB) and the European Systemic Risk Board (ESRB) today published a joint report aimed at deepening our knowledge of the implementation of positive neutral approaches to setting the CCyB in the European Economic Area (EEA).

The report describes the…