Banca d'Italia maintains 1.0 percent systemic risk buffer

Banca d'Italia has confirmed its decision to keep the systemic risk buffer (SyRB) at 1.0 percent, a measure initially introduced in April 2024 and fully effective since June of last year.

This capital requirement applies to all banks authorized to operate within Italy, specifically targeting credit and counterparty risk-weighted exposures to Italian residents.

The buffer is designed to strengthen the overall capacity of the Italian banking system, enabling it to effectively deal with potential adverse events that may arise, including those not directly linked to the broader economic-financial cycle.

The SyRB continues to be applied at both consolidated and individual levels, ensuring comprehensive coverage across the banking sector.

This consistent application underscores the central bank's commitment to maintaining robust financial stability.

The decision follows a mandatory biennial review, ensuring the buffer's continued relevance and effectiveness in the evolving financial landscape.

The systemic risk buffer strengthens the Italian banking system's capacity to deal with adverse events, including those unrelated to the economic-financial cycle.

If such events occur, Banca d'Italia's release of the buffer will provide banks with useful resources to absorb losses and support the supply of credit to the economy.

This measure ensures financial institutions can maintain stability and continue their essential role in the economy even under stress.

The decision to keep the buffer at its current level also incorporated feedback from a public consultation.

Held from February 20 to March 6, the consultation received no comments that would justify altering the buffer's level.

Banca d'Italia will re-evaluate the buffer's level at least every two years, or sooner if circumstances require, ensuring its ongoing relevance.