Capital Conservation Buffer Vs Countercyclical Buffer
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1. Context
In this video from the FRM Part 2 curriculum (Operational Risk section), we explore the differences between two buffers introduced as part of the Basel III guidelines – the Capital Conservation Buffer and Countercyclical Buffer. We take a look at the motivation behind these capital buffers, the size of each and what happens in the event of non-compliance. This video forms an addendum to the FRM Part 2 preparation course (https://www.finRGB.com/courses/frm-part-2-online-course). The details of the readings in which this topic appears are given below:
| Area | Operational Risk |
| Reading | Solvency, Liquidity and Other Regulation After the Global Financial Crisis |
| Reference | Mark Carey, “Solvency, Liquidity and Other Regulation After the Global Financial Crisis,” GARP Risk Institute, April 2019. |