BaFin has issued a general administrative act regarding the domestic countercyclical capital buffer rate. The rate is to be raised from 0 percent to 0.25 percent as of 1 July 2019. This increase is a preventive measure intended to enhance the resilience of the banking system.

As a consequence of the extended period of favourable economic environment, cyclical systemic risks have built up that could negatively impact financial stability. The increase in the countercyclical capital buffer is intended to address this current threat situation by improving the capital base of the banking sector and thus enhancing its ability to cushion losses.

The increase was recommended by the Financial Stability Committee (Ausschuss für Finanzstabilität – ASF) prior to the general administrative act being issued by BaFin.