Rethinking Macroprudential Capital Buffers

Departmental Papers, November 20, 2025

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Rethinking Macroprudential Capital Buffers

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Bibliographic details

• Authors: Paavo A Miettinen, Erlend Nier
• Published: November 20, 2025
• Series: Departmental Papers
• DOI: https://doi.org/10.5089/9798400292859.087

Overview and main finding

• Growing experience since the global financial crisis suggests that there is benefit to both advanced and emerging economies from having releasable capital buffers.
• Building such buffers in normal times enables policymakers to support lending in the face of shocks irrespective of whether stress was preceded by excessive credit growth.
• The paper explores key issues arising in operating a releasable-capital-buffer framework, including:
  • when, and to what levels, buffers should be built;
  • when they should be released; and
  • how a release should be communicated to support the supply of credit to the economy.

Analysis themes and considerations

• Operational questions examined:
  • Timing and calibration of buffer build-up.
  • Triggers and timing for buffer release.
  • Communication strategies to ensure releases support bank lending.
• The paper emphasizes applicability for both advanced and emerging economies.

Complementary mechanisms to address procyclicality

• The paper examines mechanisms that complement releasable capital buffers to address procyclicality in banks’ loan supply, including:
  • buffers that protect against sectoral risks;
  • bank-specific buffers based on stress tests; and
  • provisioning requirements.

Publication and metadata

• Authors: Paavo A Miettinen, Erlend Nier
• Date: November 20, 2025
• Series: Departmental Paper No 2025/008
• Issue: 008
• Volume: 2025
• Pages: 50
• DOI: https://doi.org/10.5089/9798400292859.087
• ISBN: 9798400292859
• ISSN: 2616-5333
• Subjects: Countercyclical capital buffers, Credit, Financial institutions, Financial regulation and supervision, Financial sector policy and analysis, Loans, Macroprudential Policy, Money
• Keywords: buffer component, buffer requirement, capital conservation, capital requirements, conservation buffer, countercyclical capital buffer, Countercyclical Capital Buffers, Credit, Global, Loans, Macroprudential Policy, Releasable Capital, releasable capital buffer

Departmental Paper No 2025/008 — "Rethinking Macroprudential Capital Buffers" (Paavo A Miettinen, Erlend Nier), November 20, 2025.

Content in this bundle

• Rethinking Macroprudential Capital Buffers; Departmental Paper No. 25/08; November 2025
  • Rethinking Macroprudential Capital Buffers; Departmental Paper No. 25/08; November 2025 (Markdown version)
  • Rethinking Macroprudential Capital Buffers; Departmental Paper No. 25/08; November 2025 (PDF)