The European Banking Authority (EBA) on Tuesday published a comprehensive review of the European Union bank microprudential, macroprudential and resolution capital framework, as part of its ongoing simplification and efficiency programme.

Building on previous initiatives from April, the EBA aims to reduce complexity for financial institutions while maintaining the resilience and resolvability of the European banking sector.

This report, which follows the July 2024 description of the capital regime and the October 2025 Report on the efficiency of the regulatory and supervisory framework, provides an overview of how capital requirements and buffers have been implemented over the past decade.

The EBA stressed that the report does not call for a fundamental redesign of the existing system but rather focuses on adjustments to improve consistency, predictability and effectiveness.

All recommendations are being assessed against four principles, which include preserving overall resilience and capital neutrality, adhering to international standards, ensuring proportionality and enhancing the efficiency and depth of the Single Market.

Regarding the microprudential stack, the EBA proposes to preserve the risk-based toolkit including Pillar 1, Pillar 2 requirements and Pillar 2 guidance while simultaneously clarifying and strengthening their specific roles.

The authority also aims to sharpen the focus of supervisory tools on institution-specific and emerging risks and remove macroprudential considerations from the microprudential stack.

To simplify the leverage ratio stack, the EBA suggests converting the leverage ratio Pillar 2 requirement into a buffer and removing the leverage ratio guidance.

For the macroprudential stack, the report recommends combining the current countercyclical capital buffer and the systemic risk buffer into a single releasable buffer supported by a common methodology.

The EBA also intends to update the Other Systemically Important Institutions framework, which includes enhancements to the scoring methodology and a review of buffer calibration.

In terms of the resolution stack, the proposal seeks to streamline the Minimum Requirement for own funds and Eligible Liabilities framework.

This would include aligning the definitions of Total Loss-Absorbing Capacity and MREL eligible resources, as well as reducing metrics and simplifying adjustments to lessen operational complexity.

Taken together, the report provides a significant contribution to the broader simplification debate by detailing specific recommendations to reduce the number of regulatory layers and stacks.

The document further emphasises the importance of coordination among authorities responsible for utilising these various instruments to ensure the framework remains focused on emerging risks.