As a whole, the existing CRR/CRD/BRRD framework has proved highly effective to ensure overall resilience of European institutions, also in light of the evident progress in terms of capital strengthening of EU banks. This includes the tools provided under the macroprudential framework, additional buffers are not necessary.
It could be argued however that the current buffer framework is not sufficiently flexible nor successful when looking at usability in times of crisis. Banks have proven to be resilient in the current Covid-19 economic crisis and were the key player in financing the economic recovery. The challenging environment rather raises the question whether banks should be overburdened with capital buffers of CET1, as issuing of CET1 leads to high costs. In fact, when looking at the individual components of the capital buffer regime we notice overlapping buffer requirements and a need to streamline the mechanisms and the consequences stemming from using the buffers, in particular to ensure adequate timelines to restore the buffers and to avoid undue market stigma effects. The interplay among requirements should also be taken in greater consideration.