13:56 07.10.2020

NBU to determine on terms of launching capital buffers in Q1 2021

2 min read
NBU to determine on terms of launching capital buffers in Q1 2021

The National Bank of Ukraine (NBU) in the period from the fourth quarter of 2020 to the first quarter of 2021 plans to determine the timing of launching the capital reserve (conservation) buffers and systemic importance buffers, according to a Wednesday posting on the website of the central bank.

According to the report, the introduction of requirements for the formation of these capital buffers was temporarily suspended in March 2020 due to the coronavirus crisis, which allowed banks to create a capital reserve to absorb losses and support lending to the economy.

The National Bank, like most central banks in the world, has not yet decided on a schedule for launching these buffers.

"This issue will be the subject of discussion at meetings of the Financial Stability Committee," the central bank said.

According to the previous plans of the NBU Board, by the beginning of 2020, banks were to form the first part of the capital conservation buffer at 0.625% and bring this figure to 2.5% in the next three years.

In turn, systemically important banks by the end of 2020 were to form a systemic importance buffer to partially ease the regulator's concerns about the financial stability of state-owned banks and reduce capital risks for the sector in general.

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