Applicable Jurisdictional Countercyclical Capital Buffer (CCyB) Ratio for Hong Kong

The Monetary Authority has decided to keep the Hong Kong jurisdictional CCyB ratio at 1%, after reviewing various indicators and information, including the IRC’s indicative buffer guide. The IRC calculates the CCyB based on deviations in credit to GDP and residential property prices to rentals from their long-term trends. The latest IRC signals a CCyB of 0%, and the projection suggests it will remain at 0% when all relevant 2023Q1 data become available. The decision to keep the CCyB ratio unchanged is appropriate due to the planned transition to a Positive Neutral CCyB of 1% in 2024. The CCyB ratio will be reviewed quarterly or more frequently. The CCyB is part of the Basel III regulatory capital framework and is designed to increase the resilience of the banking sector during periods of excess credit growth.



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