Counter-Cyclical Capital Buffer

  • Recently, to manage the economic situation, which is hampered by COVID-19, governments and central banks world over are deploying unusual weapons aside from reductions in the Cash Reserve Ratio (CRR) and repo rates.
  • The Bank of England mentioned one such unusual tool, announcing a cut in the counter-cyclical capital buffer (CCCB) to 0 per cent, from 1 per cent currently. On April 2, the financial regulatory authority of Germany also followed suit and cut the CCCB to 0 per cent from 0.25 per cent.
  • The RBI, however, has decided that it is not necessary to activate the CCCB at this point in ....
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