27 November 2019

Basel Committee issues guiding principles for the operationalisation of a sectoral countercyclical capital buffer

This document aims at supporting jurisdictions willing to implement a SCCyB by facilitating a consistent implementation across them. The principles are only relevant for jurisdictions that voluntarily choose to implement a SCCyB at a national level.

The Basel Committee on Banking Supervision today published guiding principles for the operationalisation of a sectoral countercyclical capital buffer (SCCyB). The SCCyB is a tool that can be used to complement the Basel III countercyclical capital buffer. While a bank's additional capital requirements following the activation of the CCyB depend on total risk-weighted assets, the SCCyB would allow national authorities to temporarily impose additional capital requirements that directly address the build-up of risks in a specific sector.

The guiding principles are intended to support the implementation of a SCCyB on a consistent basis across jurisdictions. The guiding principles are defined by tailoring the broad-based CCyB principles on a sectoral basis. The guiding principles are not included in the Basel standards and are only applicable for those jurisdictions that choose to implement them on a voluntarily basis.

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