Bank of Lithuania
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The financial cycle in Lithuania continued to slow down in the third quarter of 2023: the annual growth rates of loan portfolio and house prices declined steadily, without having a significant adverse impact on the real economy and the financial sector, thus far in line with the soft landing scenario published in the Bank of Lithuania’s latest Quarterly assessment of the financial cycle in Lithuania. In view of the strong credit and house price growth trends so far, the countercyclical capital buffer rate remains unchanged at 1% and is applicable in Lithuania as of 1 October 2023.

The counter-cyclical capital buffer is applied to banks and groups of central credit unions on a consolidated basis and is intended to ensure that the banking sector accumulates sufficient capital to be able to cover potential losses in case of cyclical systemic risk or during periods of economic downturn or stress.