The European Banking Authority (EBA) has proposed a comprehensive set of simplifications to the EU bank capital framework, aiming to reduce complexity while maintaining banks' resilience and resolvability. In a report published on 16 June 2026, the EBA recommends streamlining the microprudential, macroprudential and resolution capital stacks, including combining the countercyclical capital buffer and systemic risk buffer into a single releasable buffer, simplifying the leverage ratio stack, and streamlining the MREL framework. The proposals are the third major milestone under the EBA's 'Simplifying to strengthen' campaign, following an April 2026 proposal to reduce reporting burden and a simpler stress-test for 2027.
The report builds on the EBA's July 2024 description of the capital stacking order and its October 2025 Report on the efficiency of the regulatory and supervisory framework (TFE report). It does not advocate a fundamental redesign but focuses on adjustments to improve consistency, predictability and effectiveness while preserving the resilience built over the past decade. The recommendations are assessed against four guiding principles: preserving overall resilience and capital neutrality, adhering to international standards, ensuring proportionality, and enhancing the efficiency and depth of the Single Market.
Key proposals include clarifying the roles of Pillar 1, Pillar 2 requirements and Pillar 2 guidance while removing macroprudential considerations from the microprudential stack; converting the leverage ratio Pillar 2 requirement into a buffer and removing leverage ratio guidance; combining the countercyclical capital buffer and systemic risk buffer into a single releasable buffer with a common methodology; updating the O-SII framework; and streamlining MREL definitions and metrics. The report also discusses options not recommended.
The EBA highlights the importance of coordination among authorities responsible for using these instruments, though it does not discuss it in detail. The proposals are linked to the ongoing revision of the Supervisory Review and Evaluation Process (SREP) Guidelines, consulted on 24 October 2025, with a final report forthcoming.
The proposals aim to reduce operational complexity for banks, potentially lowering compliance costs and freeing up resources for lending. For national authorities, the simplified framework could improve supervisory consistency and effectiveness. However, the combination of buffers may reduce granularity in addressing specific systemic risks. The preservation of overall capital neutrality means no significant change in aggregate capital requirements, limiting immediate relief for banks. The streamlining of MREL could reduce issuance costs for resolution entities. The report's holistic approach may also influence future EU legislative initiatives on banking regulation.