Releasable and Non-Releasable Capital Buffers in the European Union: From Puberty to Maturity
DOI:
https://doi.org/10.33423/jaf.v21i3.4402Keywords:
accounting, finance, macroprudential policy, countercyclical capital buffer, capital conservation buffer, procyclicality, bank capital requirements, Basel III, European UnionAbstract
The policy framework on the countercyclical capital buffer (CCyB) and the capital conservation buffer (CCoB) is still in its early stages of implementation in the European Union (EU). Prior to the COVID-19 pandemic crisis, a general inaction bias prevailed among its Member States. The recent experience with emergency macroprudential relaxation measures in response to the pandemic shock highlighted the need for improved capital buffer usability. As the relevant framework heads towards a more mature phase, this paper discusses lessons learned from the use of buffers so far, recent findings regarding factors inhibiting their deployment and key suggestions on making the buffers fully usable in times of trouble, thus hoping to contribute to the macroprudential debate following the buffers’ first stress event.
