17/09/2019

Countercyclical Buffer Rate for the Republic of Serbia Kept Unchanged

At its meeting of 12 September 2019, the NBS Executive Board decided to keep the countercyclical capital buffer (CCyB) rate for the Republic of Serbia at 0%.

As part of its responsibility to set measures and activities aimed at maintaining and strengthening financial stability, and based on the Decision on Capital Adequacy of Banks (RS Official Gazette, Nos 103/2016 and 103/2018), the NBS calculates on a quarterly basis the reference guide based on which it sets the CCyB rate for the Republic of Serbia.

The reference guide is calculated based on the deviation of the credit-to-GDP ratio from its long-term trend. June 2019 data show that the share of total loans in GDP equalled 75.3%, while the estimated credit-to-GDP gap was -6.7 percentage points. Though rising, the estimated credit-to-GDP gap is still below its long-term trend, which indicates that the financial cycle is in a phase in which the introduction of a CCyB rate above 0% could constrain credit activity. However, the gap is closing in some segments of the household sector, which suggests the presence of risk in this segment of lending. As a result, in December last year, the NBS adopted a set of by-laws to eliminate potential risks to financial stability and citizens of the Republic of Serbia, without undesired effects on overall lending activity.

Additional information about the CCyB and the explanation for the above decision are available on the NBS website, under Financial Stability, Capital Buffers.

Financial Stability Department