Banks - Financial Stability Review – no surprises

Davy Research
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The increase in the countercyclical capital buffer (CCyB) to 1ppt is in line with the Central Bank of Ireland’s (CBI) guidance and it remains its view that a 1.5ppt rate is the neutral Irish rate. Consolidation in the domestic market may impact the other significantly important institutions buffer (O-SII) – it will be at least another year (and perhaps two) before we understand how this will play out – which is unfortunate given that clarity on capital buffers remains an important facet of investment cases.