Despite the accommodative monetary policy that provided ample liquidity to credit institutions and the clear communication from the supervisory authorities on the timeline for the flexibility granted, we notice that most banks across the globe are reluctant to dive into their buffers. Recall that the essence of macro prudential buffers is to support the real economy during an economic downturn, thus mitigating procyclicality.
I can think of several reasons behind this but I believe that the primary reason is the uncertainty about the true impact of the pandemic to the balance sheet of corporates and households. Policy makers should review this issue and the effectiveness of macroprudential buffers after the end of the ongoing crisis. The second has to do with the recognition of credit losses.