Italy identifies US, UK, Switzerland, Russia as material third countries

In December 2015, the European Systemic Risk Board (ESRB) issued Recommendation ESRB/2015/1, aiming to standardize decisions across individual Member States regarding the countercyclical capital buffer (CCyB) rate.

This standardization applies specifically to exposures to residents of countries outside the European Economic Area, referred to as third countries.

The recommendation mandates that national macroprudential authorities annually identify these third countries to which their domestic banking sectors hold material exposures.

This process is crucial for ensuring a consistent and robust approach to financial stability across the Eurozone, preventing regulatory arbitrage.

It ensures banks adequately provision for risks stemming from significant international operations, bolstering the resilience of the financial system against systemic risks.

Banca d'Italia has identified the United States, the United Kingdom, Switzerland, and Russia as material third countries for the Italian banking system.

This annual identification, based on data at 31 December 2025, aligns with the assessment carried out last year, underscoring the consistent significance of these economies.

The identification process strictly follows criteria outlined in Decision ESRB/2015/3. The assessment considers three distinct metrics: original exposures (non-risk-weighted), risk-weighted exposures, and defaulted exposures.

Each metric is calculated as a percentage of the Italian banking system's total corresponding exposures, providing a robust measure of materiality for each third country.