EU bank capital framework simplification: what the EBA stacking-orders report means for prudential reporting teams

ByOfficer

Last updated: June 2026

If you build COREP returns for an EU bank, the first thing to understand about the EBA’s June 2026 report is what it does not do. It does not change a single capital ratio you report next quarter. The report on EU bank capital framework simplification proposes design changes, not calibration changes, and most of them would land in CRR or CRD amendments that the co-legislators have not yet drafted. So the operational risk here is the opposite of a deadline scramble. The risk is that a reporting team reads the press headline, assumes a template change is imminent, and starts re-mapping fields against a moving target that has no legal text behind it.

The report that triggered this is EBA/REP/2026/12, “Report on simplifying the stacking orders of the EU prudential and resolution framework”, published on 16 June 2026. It sits on top of the EBA’s October 2025 efficiency report and its July 2024 study of how banks actually set management buffers above their regulatory stacks. Read together, these three documents describe where the EU capital framework has become hard to operate, and which layers the EBA would consolidate first. For a reporting officer, the value is not in the proposals themselves but in knowing which COREP and resolution templates would move if any of this becomes law, and which would not.

This article treats the package as a change note. It walks through the three stacks the report addresses, the data the EBA used to justify each change, and the gap between a report and a binding requirement. Where a claim is the EBA’s interpretation rather than current regulatory text, I say so.

Related reading: EBA supervisory reporting simplification

What the EU bank capital framework simplification report actually is

A bank in the EU can be subject to up to ten incremental stacks of own funds and eligible liabilities requirements. The EBA counted them in its July 2024 work: three own funds ratios on CET1, Tier 1 and Total Capital, the leverage ratio, and the risk-based and leverage-based versions of TLAC, MREL and subordinated MREL. Distribution restrictions through a Maximum Distributable Amount calculation apply across several of those stacks. That is the complexity the new report responds to.

The framing in the report is deliberate. It states that it “does not advocate a fundamental redesign of the framework but rather targeted, balanced changes” and that it “focusses on potential adjustments to the design of the framework, not on its calibration.” Capital neutrality is one of four guiding principles, alongside adherence to the Basel Committee and Financial Stability Board standards, proportionality across large and small institutions, and efficiency of the Single Market. The report does not propose to make banks hold less capital. It proposes to make the same capital requirement easier to express, supervise and report.

One number anchors the whole exercise. The total capital ratio for EU and EEA institutions rose from 15.9% of Total Risk Exposure Amount at the end of 2014 to 20.4% in December 2025, and the CET1 ratio rose from 12.7% to 15.8% over the same period. The EBA’s argument is that resilience has been built, the post-crisis reforms have done their work, and attention can now turn to the cost of running the framework rather than to its level. That distinction matters for how a reporting team should treat the report: it is an efficiency document, not a capital-raising one.

The report delivers on Recommendation 9 of the EBA’s Task Force on Efficiency, set out in EBA/REP/2025/26 of 1 October 2025. Recommendation 9 asked the EBA to “reflect on how to streamline the capital/buffer/MDA requirements, as well as the multitude of own funds, leverage and TLAC/MREL requirements.” If you want to know what the EBA will publish next on simplification, that efficiency report is the roadmap, because it numbers each workstream.

Where teams get this wrong: a report under an EBA reference number is not a consultation paper and not a final standard. EBA/REP/2026/12 does not invite responses against a deadline the way an EBA/CP consultation does. There is nothing to file, nothing to comment on through the usual channel, and no transposition clock. Treat it as supervisory direction of travel, not as a regulatory instrument.

The microprudential stack: less change than the headline suggests

The microprudential part of the framework is where reporting teams might expect the most disruption, and it is where the report is most conservative. The EBA recommends preserving the existing toolkit. It states that only micro risks should be covered by the Pillar 1 requirement, that the Pillar 2 requirement should keep its role under the CRD and the SREP Guidelines of covering risks not sufficiently captured by Pillar 1, and that Pillar 2 Guidance keeps its role too. Critically, the report “does not recommend to merge P2R, CCoB or P2G.” It also “does not propose a change in the composition of capital.”

So the C 01.00, C 02.00 and C 03.00 own funds and ratio templates that carry your CET1, Tier 1, Total Capital, Pillar 2 requirement and buffer figures are not in scope of any structural change here. If you were bracing for a merged Pillar 1 and Pillar 2 line, the report explicitly declined that path. It looked at merging the Capital Conservation Buffer with P2R or P2G and rejected it because, in its words, those options “would also entail design and calibration complexities.”

The one microprudential layer the report does want to thin out is the leverage ratio. The EBA recommends converting the leverage ratio Pillar 2 requirement, the P2R LR, into a buffer, and removing the leverage ratio Pillar 2 Guidance, the P2G LR. The reasoning is empirical. The P2R LR was imposed on only 11 institutions in 2025, around 4% of a 288-institution sample, across four competent authorities. The P2G LR is currently set for 23 institutions, around 8% of the sample, again across four competent authorities. These are sparse layers. Removing P2G LR and giving P2R LR the character of the existing leverage-ratio G-SII buffer would cut a layer for the small number of banks that carry it, while leaving the leverage ratio’s backstop function intact.

What this does not mean: it does not mean the leverage ratio itself is being relaxed. The 3% minimum leverage ratio requirement, the leverage ratio G-SII buffer and the underlying Total Exposure Measure reporting in C 47.00 and the LR templates are untouched by this design point. The change is to two supervisory add-on layers that sit on top, not to the base requirement or its measurement.

The macroprudential stack: one releasable buffer instead of two tools

This is the proposal most likely to reach a reporting template eventually, because it touches the Combined Buffer Requirement. The EBA proposes a single releasable macroprudential buffer that consolidates the Countercyclical Capital Buffer and the Systemic Risk Buffer into one element. Today these are separate. The CCyB is set country by country and an institution’s effective rate is a weighted average across the countries where it has exposures, with national CCyB rates running up to the 2.5% level that attracts automatic reciprocity. The SyRB is an EU-specific tool, set under Article 133 of the CRD (Directive 2013/36/EU), which authorities can apply broadly or to sectors, to all institutions or a subset, and at different levels of consolidation.

The report’s logic is that two releasable-or-flexible macroprudential tools sitting in the same buffer stack create overlap and inconsistency, and that a single buffer supported by a high-level common methodology would converge national practice while still letting authorities reflect local market and cycle differences. The report estimates that, if the consolidated buffer were set as the sum of the CCyB and SyRB applied today, it would amount to around 1.1% on average across the EU, illustrating that the design is meant to reproduce the existing demand rather than add to it. The report pairs this with a recommendation to update the common methodology for O-SII scoring and to consider further guidance on O-SII buffer calibration, after finding wide dispersion in O-SII buffer rates relative to scores across the EU.

For COREP, the buffer figures live in the C 04.00 memorandum rows and the buffer breakdowns in C 06.01 and C 06.02 for group and affiliate components. A consolidation of CCyB and SyRB into one releasable buffer would, if legislated, change how those rows are populated. The CCyB country-by-country breakdown that drives the institution-specific countercyclical rate would need rethinking, because a single buffer with a common methodology does not map cleanly onto the current per-country reciprocity logic. None of that is a live template change today. It is the place to watch first.

Where teams get this wrong: do not assume a single buffer means a lower buffer. The report holds capital neutrality as a principle, so the design intent is to reproduce roughly the same demand for CET1 through one buffer rather than two, not to release capital. The illustrations in the report on the average CET1 stack under a new releasable buffer are presented as design analysis, not as a calibration decision. Reading a consolidation as a cut would set the wrong expectation with your capital management function.

The resolution stack: where MREL and TLAC reporting could shift

The resolution part of the framework is the most data-heavy for reporting and resolution teams, and the report identifies several targeted changes here, alongside more far-reaching options it flags only for future consideration. The MREL framework, in the EBA’s reading, inherits much of the complexity of the going-concern stack it is built on, because the recapitalisation amount mirrors the capital the institution would need to rebuild after resolution.

The targeted changes the report supports are concrete. First, to align the definitions of TLAC and MREL eligible resources, to reduce the inconsistencies between the two frameworks that currently force resolution teams to track eligibility under two slightly different lenses. Second, to replace the use of the 8% of Total Liabilities and Own Funds figure in setting subordination requirements with a corresponding percentage of the Total Exposure Measure, so the subordination floor is expressed on the same base as the rest of MREL rather than on a separate accounting denominator. Third, to move toward a more standardised MREL calibration by simplifying the discretionary adjustment calculations or replacing them with a limited number of predefined adjustments.

If any of these is legislated, it lands in the M templates of the resolution reporting framework and in the MREL and TLAC own funds and eligible liabilities returns. Aligning TLAC and MREL eligibility definitions would change how you classify and report eligible liabilities; moving subordination from a percentage of TLOF to a percentage of TEM would change a calculation that currently sits across both an accounting base and a risk base. These are reporting-relevant, but they are design recommendations in a report, not amendments to the SRMR or BRRD.

The report is careful to separate these targeted changes from the bigger ideas. Linking MREL to a single fully subordinated metric, introducing a “Resolution Pillar 1” and “Resolution Pillar 2” structure, or amalgamating the going-concern and gone-concern requirements into one stack are all described as approaches that “provide initial elements for further future consideration.” The EBA flagged higher impact and more heterogeneous outcomes for these. A resolution reporting team should not plan around them at all yet.

Where teams get this wrong: the 8% TLOF subordination rule is not being abolished, it is being proposed for re-expression on the TEM base at an equivalent level. The report’s quantitative annex works through the equivalence factor needed for a TEM-based figure to match the current 8% TLOF requirement. The substance of the subordination floor is meant to hold; only the metric it is expressed against would change. Reporting the same economic requirement on a different denominator is exactly the kind of mapping error that produces a validation-rule failure if a team assumes the requirement itself moved.

Why this sits next to the supervisory reporting simplification consultation

The stacking-orders report is the capital-requirement half of a wider EBA simplification effort, and the reporting half is already in consultation. On 10 April 2026 the EBA opened a consultation on a major simplification of supervisory reporting, proposing to revise the ITS on supervisory reporting and on benchmarking, and to integrate the separate EU-wide stress test and benchmarking data collections into regular reporting. The headline there is a proposed reduction of around 50% in the number of data points across the EU harmonised reporting, even while adding new requirements for IFRS 18, ESG and the Fundamental Review of the Trading Book.

That consultation has real deadlines a reporting team can act on: 10 July 2026 for the main strand and 10 May 2026 for the IFRS 18-related changes. It strengthens proportionality for small and non-complex institutions through a core-plus-supplement approach. This is the document where simplification turns into actual template and data-point changes you can map. Our coverage of the EBA supervisory reporting simplification walks through that data-point reduction in detail, and the EBA 4.3 DPM changes for COREP and FINREP show how the data-point model is already moving.

The connection to the capital-framework report is the EBA’s efficiency programme. The October 2025 efficiency report set a target of reducing reporting costs by 25%, in line with the European Commission’s expectations, building on the roughly 20% reduction already achieved after the 2021 cost-of-compliance study. It also noted that small and non-complex institutions report only up to 30% of the data that large institutions report, which is the proportionality baseline the new consultation builds on. The capital-framework report and the reporting consultation are two outputs of the same effort. One simplifies what is required; the other simplifies what is reported about it.

Where teams get this wrong: do not conflate the two. The stacking-orders report changes no template and has no deadline. The supervisory reporting consultation changes data points and has hard response dates. If you are allocating analyst time this quarter, the consultation is where it goes, not the capital-framework report.

What stays exactly the same in your reporting today

It is worth being blunt about the operational reality. As of June 2026, nothing in your current reporting cycle changes because of EBA/REP/2026/12. CRR3 and CRD VI remain the in-force capital framework. The output floor transitional arrangements under Article 465 of the CRR continue on their existing phase-in. The FRTB market risk capital requirements remain on their current timeline. The buffer stack you report in C 04.00 keeps its current structure: the Combined Buffer Requirement is built from the Capital Conservation Buffer, the institution-specific CCyB, the higher of the G-SII or O-SII buffer, and the SyRB, where applicable. Those elements remain separate in current reporting.

The report itself acknowledges its place in a longer chain. Several of its recommendations link to the revision of the SREP Guidelines, which the EBA consulted on from 24 October 2025 with a final report still to come. The interplay between the output floor and Pillar 2, mandated under Article 104a(7) of the CRD as amended by CRD VI, is a separate EBA workstream that the stacking-orders report references rather than resolves. None of these is settled. A reporting team that maps its templates to the report’s proposals now would be mapping to a design that has no legal text and several open dependencies.

The honest practitioner read is that this is a planning document for the next two to three years of CRR and CRD amendment cycles, not an instruction for the next return. The right response is to add the proposals to your regulatory change log with a status of “EBA proposal, no Level 1 text”, assign an owner to watch the efficiency report’s recommendation numbers, and put real effort into the reporting consultation that does have deadlines.

Frequently Asked Questions

Does the EBA stacking-orders report change any COREP or resolution template I file in 2026?

No. EBA/REP/2026/12 is a report setting out design proposals, not a binding standard or a consultation with template changes. Your COREP own funds, buffer and leverage templates and your MREL and TLAC resolution returns are unchanged by it. Any template change would follow later CRR or CRD amendments that have not been drafted.

Is the EU lowering bank capital requirements through this simplification?

The report holds capital neutrality as one of its four guiding principles and states that it focuses on the design of the framework, not its calibration. The proposals are intended to reproduce roughly the same capital demand through fewer or clearer layers, not to release capital. The total capital ratio for EU and EEA institutions reached 20.4% of TREA in December 2025, and the report frames resilience as already built.

What exactly changes in the leverage ratio stack?

The report recommends converting the leverage ratio Pillar 2 requirement, the P2R LR, into a buffer, and removing the leverage ratio Pillar 2 Guidance, the P2G LR. The 3% minimum leverage ratio requirement, the leverage ratio G-SII buffer and Total Exposure Measure reporting are not affected. The P2R LR applied to only 11 institutions in 2025 and the P2G LR to 23, so the change affects a small set of banks.

What is the single releasable macroprudential buffer?

It is a proposed consolidation of the Countercyclical Capital Buffer and the Systemic Risk Buffer into one buffer element, supported by a high-level common methodology that still allows authorities to reflect local cycles and risks. It is a design proposal in the report, not a current requirement. The Combined Buffer Requirement you report today still treats CCyB and SyRB as separate elements.

How would the MREL and TLAC changes affect resolution reporting?

The supported targeted changes are aligning TLAC and MREL eligible-resource definitions, expressing the subordination requirement as a percentage of the Total Exposure Measure instead of 8% of Total Liabilities and Own Funds at an equivalent level, and standardising discretionary MREL adjustments. If legislated, these would affect how eligible liabilities are classified and how subordination is calculated in the resolution returns. They remain proposals, not amendments to the SRMR or BRRD.

Where does the supervisory reporting simplification consultation fit?

It is the separate, actionable half of the EBA’s simplification effort. The 10 April 2026 consultation proposes reducing the number of data points in EU harmonised reporting by around 50% and has response deadlines of 10 July 2026 for the main strand and 10 May 2026 for the IFRS 18 changes. Unlike the capital-framework report, it changes data points and has firm dates.

What is Recommendation 9 of the Task Force on Efficiency?

It is the recommendation in the EBA’s October 2025 efficiency report, EBA/REP/2025/26, asking the EBA to reflect on streamlining the capital, buffer and MDA requirements and the multiple own funds, leverage and TLAC/MREL requirements. The June 2026 stacking-orders report is the EBA’s delivery on that recommendation. The efficiency report’s recommendation numbers are a useful index for tracking what comes next.

Related Articles

Key Takeaways

  • EBA/REP/2026/12, published 16 June 2026, is a report on EU bank capital framework simplification. It proposes design changes, not calibration changes, and changes no current reporting template.
  • The microprudential proposals are conservative: keep Pillar 1, Pillar 2 requirement and Pillar 2 Guidance distinct, do not merge them, and only thin out the leverage ratio by converting P2R LR to a buffer and removing P2G LR.
  • The macroprudential proposal that matters most for reporting is consolidating the CCyB and SyRB into a single releasable buffer, which would eventually touch the Combined Buffer Requirement rows in COREP.
  • The resolution proposals would align TLAC and MREL eligible-resource definitions, re-express the subordination floor on the Total Exposure Measure rather than 8% TLOF, and standardise MREL adjustments.
  • Capital neutrality is a stated principle. The EU total capital ratio reached 20.4% of TREA in December 2025, and the report does not propose to release capital.
  • The actionable companion is the 10 April 2026 supervisory reporting consultation, which proposes cutting data points by around 50% with deadlines of 10 July 2026 and 10 May 2026.
  • The right response is to log the proposals as an EBA position with no Level 1 text, track the efficiency report’s recommendation numbers, and spend analyst time on the reporting consultation that has deadlines.

Sources and References

  • EBA press release, “The EBA proposes simplifications to the EU bank capital framework in a holistic manner to strengthen its efficiency”, 16 June 2026: eba.europa.eu
  • EBA, “Report on simplifying the stacking orders of the EU prudential and resolution framework”, EBA/REP/2026/12, 16 June 2026: PDF
  • EBA, “Report on the efficiency of the regulatory and supervisory framework”, EBA/REP/2025/26, 1 October 2025 (Task Force on Efficiency, Recommendations 5, 9 and 10): PDF
  • EBA, “Report on stacking orders and capital buffers – reflections on management buffer practices in the EU”, 15 July 2024: PDF
  • EBA press release, “The EBA consults on major simplification of supervisory reporting to deliver a simpler, smarter and more proportionate framework”, 10 April 2026: eba.europa.eu
  • EBA, “Simplification and efficiency of the Regulatory and Supervisory Framework” overview page: eba.europa.eu
  • Regulation (EU) 575/2013 (CRR), as amended by Regulation (EU) 2024/1623 (CRR3): Article 92 own funds requirements, Article 465 output floor transitional: EUR-Lex
  • Directive 2013/36/EU (CRD), as amended by Directive (EU) 2024/1619 (CRD VI): Article 104a output floor and Pillar 2 interplay; Article 133 Systemic Risk Buffer: EUR-Lex

What a reporting team should do with a report that changes nothing yet

The instinct with any EBA publication that touches capital is to ask which template moves. With this one, the honest answer is none, not this year and not on the strength of this report alone. The discipline is to hold two timelines apart. The capital-framework report is a multi-year design conversation that will surface in future CRR and CRD amendments, and the place to track it is the recommendation numbering in the efficiency report. The supervisory reporting consultation is the near-term, dated, template-level work that deserves your analyst hours now. Log the first, work the second, and resist the urge to re-map fields against proposals that no legal text yet supports.

Disclaimer: The information on RegReportingDesk.com is for educational and informational purposes only. It does not constitute legal, regulatory, tax, or compliance advice. Always consult your compliance officer, legal counsel, or the relevant supervisory authority for guidance specific to your institution.

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