Luxembourg countercyclical buffer stays at 0.50% for Q4 2026

Credit institutions with relevant exposures in Luxembourg keep a 0.50% countercyclical capital buffer for the fourth quarter of 2026.Public Règlement CSSF N° 26-03 of 30 September 2026 fixes the rate applicable to relevant exposures located in Luxembourg at 0.50% for that quarter.Public The annexed recommendation of the Comité du risque systémique frames the rate as 0.5% of risk-weighted assets on Luxembourg exposures, a level in place since 1 January 2021. The regulation enters into force on the day of its publication in the Journal officiel du Grand-Duché de Luxembourg.

Each institution computes its own institution-specific buffer as the weighted average of the buffer rates of every jurisdiction where its relevant exposures are located, weighted by its own-funds requirements for credit risk. That calculation rule covers all CRR institutions, including Luxembourg branches of institutions headquartered in third countries. Relevant exposures are all exposure classes other than those listed in Article 112(a) to (f) of Regulation (EU) No 575/2013 that carry own-funds requirements for credit risk, for specific or incremental default and migration risk in the trading book, or for securitisations.

Investment firms that qualify as small and medium-sized enterprises remain outside the requirement. A firm counts as such where it employs fewer than 250 persons and its annual turnover does not exceed 50 million euros or its annual balance-sheet total does not exceed 43 million euros.Public Those firms are exempt from both the countercyclical and the capital conservation buffer, on the ground that their combined balance sheet is below 0.02% of banks' total balance sheet and the exemption does not threaten national financial stability.

The calibration keeps the rate unchanged even though the mechanical guide points to zero. The credit-to-GDP ratio, based on bank loans to Luxembourg households and non-financial corporations, stood at an estimated 78.1% in the second quarter of 2026, with a negative gap of 17.2% against its long-term trend, below the 2% activation threshold, so the buffer guide computed under Recommendation CERS/2014/1 is 0%. The supplementary cyclical-risk assessments by the Banque centrale du Luxembourg and the CSSF nevertheless support holding the rate at 0.5%: in an uncertain economic and geopolitical environment, own-funds cushions must stay large enough to absorb shocks, in particular any shock hitting households' disposable income or borrowers' repayment capacity.

The CSSF acted as the designated authority after consulting the Banque centrale du Luxembourg and taking into account the systemic risk committee's recommendation CRS/2026/005 of 7 September 2026, following the advisory committee's opinion and the European Central Bank's decision under Article 5 of the SSM Regulation not to oppose the measure.

Legal basis: Règlement CSSF N° 26-03 of 30 September 2026 (Article 1er) with recommendation CRS/2026/005, under Article 59-7 of the loi du 5 avril 1993 relative au secteur financier; calculation under Règlement CSSF N° 15-01 and exemption under Règlement CSSF N° 15-05.