The CCyB is designed to counter the buildup of excessive credit at a macroeconomic level, ensuring a more stable credit supply. It is to be built up during periods of economic growth and drawn down during economic downturns.
The CCyB is equivalent to the total risk exposure amount calculated in accordance with Article 92(3) of Regulation (EU) No 575/2013 multiplied by the weighted average of the countercyclical buffer rates that apply in the jurisdictions where the relevant credit exposures of the CIF are located or applied.
The Macroprudential Authority has defined in its macroprudential policy a list of criteria used for setting the CCyB rates on exposures of institutions to each material country and to exposures of institutions to third countries.
According to section 5(2) of the Macroprudential Oversight of Institutions Law of 2015, the Macroprudential Authority may exempt small and medium sized CIFs from holding an institution specific CCyB, in addition to their Common Equity Tier 1 Capital.
The Macroprudential Authority after its latest assessment has decided not to exempt small and medium sized CIFs with immediate effect.
Therefore, all CIFs that are authorized to provide the investment services listed in points 3 (dealing on own a/c) and/or 6 (underwriting with firm commitment) of the Law are obliged to maintain an institution specific CCyB.
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