On 15 July 2024, the European Banking Authority (EBA) issued a report on stacking orders and capital buffers.

The report covers a broad analysis that the EBA conducted on the stacking order of requirements for own funds and eligible liabilities applicable to banks, with a focus on micro-prudential elements. The report describes all regulatory stacks, i.e., going and gone concern stacks, that are relevant for understanding a bank’s capital headroom above the requirements. The report also provides a high-level comparison with the UK and the US. The final section of the report examines institutions’ practices on management buffers reflecting upon an EBA dedicated survey and an EBA roundtable meeting held on 23 October 2023.

Next steps

The analysis in the report will inform other EBA regulatory products, such as the one stemming from the mandate on the interplay between the output floor and Pillar 2 (Art 104a(7) Capital Requirements Directive 6) and prepare the ground for the update of the supervisory review and evaluation process guidelines following the EU Banking Package implementation.