TIRANA, Dec 26 /ATA/ Second-level banks must meet further increase in minimum capital adequacy requirements from the beginning of next year. The capital conservation buffer as of January 1, 2024 will increase to 2.5%, from the 2% that was the requirement during 2023.
The regulation on macro-prudential capital buffers was adopted in mid-2019 and will be incrementally applied until 2024. The requirements for a higher capitalization of banks are in line with the measures taken by peer supervisory institutions in Europe following the financial crisis and aim to increase the resistance of commercial banks against possible risks in the future.
Macro-prudential capital buffers are added to the basic regulatory requirements of banks’ capitalization, which are defined in the “Capital Adequacy” regulation. From 12%, which is the minimum cap of capital adequacy, with the conservative buffer of 2.5%, this limit has reached 14.5%. The January 1, 2024 increase is the last increase in the five-year gradual increase cycle of the capital conservation buffer.
At the end of the third quarter of 2023, the capitalization of the banking sector reached an all -time high. The data of the Bank of Albania show that the capital adequacy indicator reached 19.63%, from 19.3% in the same period of the previous year.
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