A Building Block Approach for Introducing a Positive Neutral Countercyclical Capital Buffer in Albania
Year: 2025
Type: article
Abstract: The paper discusses the introduction of a positive neutral countercyclical capital buffer (CCyB) for Albania. The building blocks present a step-by-step guide to assess preconditions to be in place. Applied to the case of Albania, authors employ a set of methods for the calibration of a positive neutral rate, including a quantile local projection and stress-test based approach. The paper (i) finds a positive neutral CCyB regime is feasible and net beneficial for Albania, (ii) identifies the adequate range of the positive neutral rate between 100-200bps, and (iii) provides a template for emerging markets to explore positive neutral CCyB regimes.
Source: Selected Issues Papers
Authors: Maximilian Fandl, Giorgia De Nora, Eugena Topi
Institutions: European Central Bank, International Monetary Fund
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W7117447095
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