Central Bank of Russia raises countercyclical capital buffer for banks to 0.25% starting Feb 1

MOSCOW. Feb 3 (Interfax) - The Central Bank of Russia is increasing the countercyclical capital buffer for banks to 0.25% of risk-weighted assets starting February 1.

The countercyclical buffer is built up during periods of accelerated lending growth and released in times of crisis. Use of this tool aims to enhance the resilience of the banking sector to potential shocks and limit their impact on lending in the economy. The Central Bank assumes that the countercyclical buffer should reach 1% of risk-weighted assets in the long term.

Amid continued corporate lending growth, the Central Bank decided to introduce the countercyclical buffer earlier than initially planned - from February 1, 2025 instead of July 1, 2025. Until now, the buffer had remained at zero for many years.

The next increase in the buffer, to 0.5%, is scheduled for July 1, 2025. The Central Bank has promised to closely monitor the extent of the slowdown in lending activity in the coming months. It is ready to adjust the timeline for forming the countercyclical buffer "if necessary to support banks' ability to ensure balanced lending growth in the economy," it said.

According to the Central Bank's estimates, introducing the countercyclical buffer and its subsequent increase in 2025 will allow banks to accumulate a capital buffer of 800 billion rubles.