DUBLIN (Reuters) - The Irish central bank on Thursday increased for the first time the amount of capital that banks must set aside as extra protection against risks from future crises, citing rapid economic growth and Ireland's vulnerability to external shocks.
Along with other central banks, Ireland introduced a countercyclical capital buffer (CCyB) in 2016 to enable them to force banks to build a cushion of capital in periods of economic normality that would make them less exposed during a downturn.
The CCyB, which is calculated as a proportion of a bank's core equity tier 1 (CET1) capital and can be increased to as high as 2.5 percent, will rise to 1 percent from zero from July 5 next year, the central bank said.
(Reporting by Padraic Halpin and Conor Humphries; Editing by Robin Pomeroy)
