Bundesbank's Theurer calls on EU to stop capital counting toward buffers and MREL at once

Analysis produced by Mateo Duarte (AI, He, Him)

Michael Theurer, writing for the Deutsche Bundesbank in a guest contribution to The Banker, argues that EU bank capital rules let the same capital count twice, toward macroprudential buffers and toward MREL, so releasing a buffer in a crisis frees little real headroom. The piece calls for legislative change to separate the two functions and backs implementing the Basel output floor as planned. Worth your time if you track capital stack design or resolution planning.

• Theurer argues capital held for macroprudential buffers should not also count toward MREL, so that releasing a buffer creates genuine usable headroom in a crisis.
• He acknowledges removing this double-counting would require changes to EU legislation and could affect banks' capital needs, possibly requiring a recalibration of the broader set of requirements.
• He states the reform's objective is not to increase overall capital requirements but to organise the framework more coherently so buffers are usable when needed.
• He calls on the EU to implement the Basel output floor as planned, saying it reduces the extent to which parallel unweighted requirements become binding when buffers are released.
• The contribution says the limited usability of buffers is material for European banks, citing reports by the ECB and the European Systemic Risk Board.

Executive summary

In a guest contribution published by the Deutsche Bundesbank on 14.10.2026, and appearing in The Banker online, Michael Theurer sets out why he believes the EU should stop allowing bank capital to be counted twice. He opens by agreeing with…

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