Enhancing the ECB’s O-SII framework

Maciej Grodzicki, Anton van der Kraaij, Ursula Vogel () and Balázs Zsámboki

Macroprudential Bulletin, 2025, vol. 30

Abstract: Capital buffers for other systemically important institutions (O-SIIs) are set by national authorities. They vary greatly across the EU Member States participating in the banking union. On 1 January 2025 the ECB started using an enhanced floor methodology to assess national O-SII buffer decisions. This methodology adopts a banking union (BU) perspective to address “too-big-to-fail”-related risks at the BU level. The aim is to reduce the heterogeneity in O-SII buffers and achieve a more consistent treatment of the most systemically important institutions. Furthermore, the enhanced methodology recognises the progress made on the European banking union, in line with the approach taken in the G-SIB framework. It introduces a BU floor for O-SII buffers, calibrated based on a linear function mapping O-SII scores from the BU perspective to minimum buffer rates. The enhanced methodology will be fully phased in by 2028. JEL Classification: G21, G28

Keywords: capital buffers; macroprudential policy; systemically important institutions (search for similar items in EconPapers)
Date: 2025-08
Note: 1486549
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