The Central Bank of Cyprus (CBC) has decided to maintain the countercyclical capital buffer (CCyB) at 1.5 per cent, with the measure set to take effect from January 14, 2026.
In an official announcement, the CBC stated that, in accordance with the Macroprudential Supervision of Institutions Laws of 2015 to 2022, it deemed it necessary to keep the CCyB at 1.5 per cent, a level first adopted by the bank’s decision on January 14, 2025.
The set percentage will come into force a year later, in January 2026.
At present, the countercyclical capital buffer rate in effect since June 2, 2024, stands at 1 per cent.
The CCyB serves as a macroprudential tool at the CBC’s disposal to enhance the resilience of the financial system against evolving risks.
By determining the buffer rate, the CBC aims to build a financial cushion to strengthen the stability of the banking sector during periods of financial stress, when losses may occur.
This measure helps ensure the continued availability of credit and mitigates the impact of downturns in the financial cycle.
Additionally, the countercyclical capital buffer can play a role in curbing excessive lending during periods of rapid economic expansion, contributing to the overall stability of the financial system.
