countercyclical capital buffer (CCyB)

What is countercyclical capital buffer (CCyB)?

countercyclical capital buffer (CCyB) definition and meaning on Finance terms:
A capital buffer intended to ensure that credit institutions accumulate sufficient capital during periods of excessive credit growth to be able to absorb losses during periods of stress. It has been implemented in Europe via Article 130, 135-140 CRD IV and it amounts to 0-2. 5% of total risk exposure amount and must be met with CET1 capital, but it can be set at a higher level under certain procedures. The buffer is institution-specific and is calculated as a weighted average of the countercyclical buffer rates that apply in the countries where an institution

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