Irish Central Bank maintains countercyclical capital buffer at zero

The move comes as the Bank of England increases its rate for lenders to 0.5%

The newly built offices of the Central Bank of Ireland at North Wall Quay. (Photograph: Alan Betson / The Irish Times)

The newly built offices of the Central Bank of Ireland at North Wall Quay. (Photograph: Alan Betson / The Irish Times)

The Central Bank of Ireland has said that the countercyclical capital buffer will remain at zero on the basis that aggregate credit conditions remain subdued.

The countercyclical buffer is a capital requirement that applies to banks and investment firms designed to make the banking system more resilient. If credit growth becomes excessive, the countercyclical buffer will increase capital requirements. Essentially, the buffer forces banks to set aside capital in good times to draw down in bad times.

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