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Hong Kong’s countercyclical capital buffer ratio remains at 1 pct

Abstract : Chief Executive of the Hong Kong Monetary Authority Eddie Yue announced on Thursday that the countercyclical capital buffer (CCyB) ratio for Hong Kong remains unchanged at 1 percent.

HONG KONG, Jan. 28 (Xinhua) — Chief Executive of the Hong Kong Monetary Authority Eddie Yue announced on Thursday that the countercyclical capital buffer (CCyB) ratio for Hong Kong remains unchanged at 1 percent.

“The economic environment in Hong Kong is still subject to a high level of uncertainty at the moment. It is therefore appropriate to keep the CCyB ratio unchanged and continue to monitor the situation for a few more quarters,” Yue said.

In setting the CCyB ratio, the Hong Kong Monetary Authority considered a series of quantitative indicators and qualitative information including an “indicative buffer guide”, which is a metric providing a guide for CCyB ratio based on the gap between the ratio of credit to GDP and its long-term trend, and between the ratio of residential property prices to rentals and its long term trend.

The CCyB is an integral part of the Basel III regulatory capital framework and is being implemented in parallel by Basel Committee member jurisdictions worldwide. It has been designed by the Basel Committee to increase the resilience of the banking sector in periods of excess credit growth. The banking sector can then act as a “shock absorber” in times of stress, rather than as an amplifier of risk to the broader economy. Enditem

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Source: Hong Kong’s countercyclical capital buffer ratio remains at 1 pct

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