Banka Slovenije is changing over to more active macroprudential policy

With the aim of managing risks and maintaining the resilience of the Slovenian banking system, we are updating our macroprudential policy toolkit. We have taken the decision to introduce a positive neutral countercyclical capital buffer rate. This is a preventively pitched instrument, which aims to increase the resilience of the Slovenian banking system. Banks will be required to meet a capital buffer rate of 1.0% as of 2025. At the same time we are reducing the sectoral buffer that addresses the risks inherent in the real estate market.

Banka Slovenije is modifying its approach to setting its cyclical capital-based macroprudential measures. The aim is to strengthen their preventive role. In this way there will be capital available for release even in the event of shocks that do not necessarily originate in the financial system (such as the pandemic) and that are not the result of excessive lending. In the event of the materialisation of risks, the release of the buffer reduces the risk of requirements with regard to regulatory capital constraining the banks in their lending. The release of capital requirements will allow banks to absorb losses and to continue lending to the real sector.

As of 2025 we are therefore raising the countercyclical capital buffer rate for exposures in Slovenia from 0.5% to 1.0% of the total risk exposure amount. Banks will be required to provide more capital for domestic exposures in a year’s time. Banka Slovenije last raised the countercyclical capital buffer rate a year ago.

In the wake of the easing of the cyclical risks inherent in the real estate market, we have also taken the decision to reduce the sectoral systemic risk buffer for retail exposures to natural persons secured by residential real estate from 1.0% to 0.5%. Our assessment is that the situation on the Slovenian real estate market is easing, which is reducing the need to use this buffer.