Donnery proposes merging EU capital buffers into two tiers
ECB Supervisory Board member Sharon Donnery has proposed simplifying the European Union's capital architecture by consolidating macroprudential buffers into two instruments. Writing for Eurofi on September 16, 2026, she highlighted the need to improve buffer usability in times of crisis.
From four buffers to two
Recommendations developed by the ECB High-Level Task Force and endorsed by the Governing Council consolidate the macroprudential capital framework into two tools.
A non-releasable buffer would combine the capital conservation buffer with the higher of the buffers for global and other systemically important institutions.
A releasable buffer would merge the countercyclical and systemic risk buffers, setting a positive rate in early phases of the financial cycle.
Donnery noted that using buffers must be “understood as the system working as intended, not as a sign of weakness,” while Pillar 2 guidance remains separate.
Stigma and parallel constraints
Experience from the pandemic showed that parallel requirements such as the leverage ratio and MREL constrained buffer usability, as banks avoided dipping into capital reserves due to market stigma and distribution restrictions.
To address governance without altering statutory competences, Donnery advocated strengthening the existing Macroprudential Forum alongside the Single Resolution Board (SRB) to align macroprudential, microprudential, and resolution policies across the banking union.
Pragmatic cleanup with political limits
Merging overlapping capital buffers removes bureaucratic clutter and directly addresses the paralysis banks exhibited during past crises.
However, relying on soft coordination through the Macroprudential Forum leaves national ring-fencing intact.
Real progress requires member states to cede macroprudential vetoes.