The Bank of Spain has decided to keep the percentage of the countercyclical capital buffer for the first quarter of 2019 at 0%, as reported by the supervisor in a note.
The Bank of Spain considers that the analysis of the risk indicators reveals that generalized excessive growth of credit is not occurring in Spain, so it has decided to keep the cushion at 0%.
Specifically, with data from last July, the credit-to-GDP gap (which measures the deviation of the total credit to GDP ratio from its long-term trend level) stands at -47.9 percentage points, well below the 2 positive percentage points that serve as a reference to activate the mattress.
In order to make this decision, the Bank of Spain analyzes, in addition to the credit-to-GDP ratio, other indicators such as credit intensity, real estate price imbalances, corporate and family debt and balance of the current account balance in relation to GDP.
The cushion is a macroprudential policy instrument that requires entities to accumulate capital during periods of excessive credit growth to be used in times of correction, which contributes to the solvency of the banking system and smoothes credit cycles.