Serbia Economic and FDI Outlook
National Bank of Serbia
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Capital Buffers – Implementation
of Macroprudential Policy Measures
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Capital buffers increase the resilience of banks to losses, reduce excessive or underestimated exposures
and restrict the distribution of capital.
These macroprudential instruments should limit systemic risks in the financial system, which can be
cyclical (capital conservation buffer and countercyclical capital buffer) or structural (capital buffer for a
systemically important bank and systemic risk buffer).
The following capital buffers are used in the Republic of Serbia:
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Capital conservation buffer;
Countercyclical capital buffer, in order to mitigate and prevent excessive credit growth;
Capital buffer for a systemically important bank, with the objective to limit the systemic impact of
misaligned incentives in terms of favoring certain financial institutions;
Systemic risk buffer, introduced to limit the risk of euroisation, one of the key structural non-cyclical
systemic risks to the stability of the financial system of the Republic of Serbia.
The capital conservation buffers may consist only of Common Equity Tier 1 capital equal to 2.5% risk-
weighted assets for capital conservation buffer, 1% or 2% risk-weighted assets for capital buffer for
systemically important banks, depending on the systemic importance level and 3% of total foreign
currency and foreign currency-indexed placements of a bank approved to corporates and households in
the Republic of Serbia for systemic risk buffer. Countercyclical buffer rate is set at 0%.
Capital buffers apply as of 30 June 2017.
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