The European Banking Authority (EBA) has released a review of the EU framework governing bank capital in supervision, macroprudential policy and resolution, setting out a series of proposals intended to make the system less complex.
The publication is part of the authority’s broader simplification and efficiency work. It follows proposals issued in April on easing reporting demands for banks and introducing a simpler stress test in 2027.
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The review builds on the EBA’s July 2024 account of the EU capital regime, referred to as the “stacking order”, and its October 2025 report on the efficiency of the regulatory and supervisory framework.
In the new document, the authority outlines how capital requirements and buffers have been applied across the EU over the past ten years.
On the microprudential side, the EBA proposes retaining the current risk-based framework, including Pillar 1, Pillar 2 requirements and Pillar 2 guidance, while making their roles clearer and stronger.
It also suggests focusing supervisory tools more closely on institution-specific and emerging risks, removing macroprudential elements from the microprudential framework, and simplifying the leverage ratio framework by turning the leverage ratio Pillar 2 requirement into a buffer and removing the leverage ratio guidance.
For the macroprudential framework, the authority proposes merging the countercyclical capital buffer and the systemic risk buffer into a single releasable buffer supported by a high-level common methodology.
It also proposes changes to the O-SII framework, including adjustments to the scoring methodology and consideration of buffer calibration.
The EBA also proposed changes to simplify the MREL framework. These include aligning the definitions of TLAC and MREL eligible resources, reducing the number of metrics and simplifying adjustments to lower operational complexity.
In line with the TFE report, the document also points to the importance of coordination among the authorities responsible for these instruments, although it does not examine that issue further.
