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Macroprudential capital buffers – objectives and usability

Author

Listed:
  • Behn, Markus
  • Rancoita, Elena
  • Rodriguez d’Acri, Costanza

Abstract

This article discusses capital buffer usability in the Basel III framework. Although buffers are intended to be used in a crisis, a number of factors can prevent banks from drawing them down in case of need, with potentially adverse effects for the economy. The article reviews the functioning of the framework in the COVID-19 crisis and outlines possible implications for future policy design. JEL Classification: G01, G21, G28

Suggested Citation

  • Behn, Markus & Rancoita, Elena & Rodriguez d’Acri, Costanza, 2020. "Macroprudential capital buffers – objectives and usability," Macroprudential Bulletin, European Central Bank, vol. 11.
    • Handle: RePEc:ecb:ecbmbu:2020:0011:1
    Note: 2203070
    as

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    File URL: https://www.ecb.europa.eu//pub/financial-stability/macroprudential-bulletin/html/ecb.mpbu202010_1~01c4f1a5f4.en.html
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    Citations

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    Cited by:

    1. Lucas Avezum, 2023. "To use or not to use? Capital buffers and lending during a crisis," Working Papers w202308, Banco de Portugal, Economics and Research Department.
    2. Markus Eller & Reiner Martin & Lukas Vashold, 2021. "CESEE’s macroprudential policy response in the wake of the COVID-19 crisis," Focus on European Economic Integration, Oesterreichische Nationalbank (Austrian Central Bank), issue Q1/21, pages 55-69.
    3. Lubberink, Martien, 2022. "Max headroom: Discretionary capital buffers and bank risk," International Review of Financial Analysis, Elsevier, vol. 84(C).

    More about this item

    Keywords

    bank regulation; Basel III; buffer usability; capital buffers; countercyclical capital buffer; macroprudential policy; macroprudential space;
    All these keywords.

    JEL classification:

    • G01 - Financial Economics - - General - - - Financial Crises
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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