[22] With vulnerabilities having built up in the system at the same time, the Federal Financial Supervisory Authority (BaFin) announced a package of measures at the start of 2022 that, from February 2023, will conserve just under € billion (surplus capital) in the form of macroprudential buffers. [23] These capital buffers stabilise lending in the event of a shock.
This is because supervisors can release the buffers should heavy losses materialise, or threaten to, and banks would otherwise find themselves needing to drastically scale back lending. In a situation such as that, banks now have larger buffers to absorb shocks to the real economy and stabilise lending.