Thus, capital requirements are determined through decisions taken by microprudential supervisors with respect to pillar I and pillar II requirements, but also through the polices implemented by macroprudential authorities with respect to the Other Systemically Important Institutions (O-SII) buffer and the countercyclical capital buffer (CCyB), for example.
Another aspect of banks’ capital requirements that is relevant is the Minimum Requirement for own funds and Eligible Liabilities (MREL), which is decided upon by resolution authorities. Supervisors must therefore cooperate and coordinate effectively with macroprudential authorities and resolution authorities – whilst respecting their differing mandates – to ensure the resilience and stability of the banking system.