## A Building Block Approach for Introducing a Positive Neutral Countercyclical Capital Buffer in Albania

_Selected Issues Papers, December 29, 2025_

## Source details

**Canonical URL:** [A Building Block Approach for Introducing a Positive Neutral Countercyclical Capital Buffer in Albania](https://www.imf.org/en/publications/selected-issues-papers/issues/2025/12/29/a-building-block-approach-for-introducing-a-positive-neutral-countercyclical-capital-572909)

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## Bibliographic details
- Authors: Maximilian Fandl, Giorgia De Nora, Eugena Topi
- Published: December 29, 2025
- Series: Selected Issues Papers
- DOI: https://doi.org/10.5089/9798229035132.018

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### Overview
- Purpose: Discusses introduction of a positive neutral countercyclical capital buffer (CCyB) for Albania using a building block, step-by-step guide to assess preconditions.
- Application: Applied to the case of Albania; provides a template for emerging markets to explore positive neutral CCyB regimes.
- Authors: Maximilian Fandl, Giorgia De Nora, Eugena Topi
- Date: December 29, 2025

### Methods and Analytical Approach
- Building block approach: Step-by-step guide to assess institutional and data preconditions required to implement a positive neutral CCyB.
- Calibration methods employed:
  - Quantile local projection.
  - Stress-test based approach.
- Scope: Focus on calibration of a positive neutral rate and evaluation of feasibility and net benefits for Albania.

### Key Findings
- Feasibility and benefits:
  - The paper finds a positive neutral CCyB regime is feasible and net beneficial for Albania.
- Calibrated range:
  - Identifies the adequate range of the positive neutral rate between 100-200bps.
- Broader applicability:
  - Provides a template for emerging markets to explore positive neutral CCyB regimes.

### Policy Recommendations and Implications
- Implement a building block assessment to verify preconditions before introducing a positive neutral CCyB.
- Use a combination of quantile local projection and stress-test based approaches for calibration of the neutral rate.
- Consider adopting a positive neutral CCyB within the identified range of 100-200bps for Albania, subject to country-specific preconditions and monitoring.

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_Source: https://www.imf.org/en/publications/selected-issues-papers/issues/2025/12/29/a-building-block-approach-for-introducing-a-positive-neutral-countercyclical-capital-572909_