EBF responds to EBA on climate risk Systemic Risk Buffer.

The European Banking Federation (EBF) issued its Key Messages on the EBA Consultation on Systemic Risk Buffer concerning climate risk. This response, dated 30 April 2026, from Brussels, addresses the EBA's consultation. The EBF's stance is a formal reply to the proposed framework for managing climate-related systemic risks within the banking sector, highlighting their initial observations and recommendations on the matter. The EBF urges a fundamental rethink regarding a climate-related Systemic Risk Buffer. They question if it's the right approach for climate risk and the appropriate timing for such a revision. This concern arises amidst a focus on regulatory simplification and the upcoming European Commission report on financial sector competitiveness, which will assess the macroprudential framework. A novel, complex buffer with untested calibration sends a contradictory signal to markets. The EBF emphasizes that the current regulatory environment prioritizes simplification. Therefore, introducing a new, intricate buffer without proven calibration methods might undermine efforts to streamline financial regulations and could potentially destabilize market expectations regarding future stability and investment. This highlights the need for careful consideration. Capital buffers, typically designed for structural systemic shocks, are deemed inappropriate by the EBF for emerging risks like climate change. Climate-related financial risks involve deep uncertainty and long time horizons, which don't align with the Systemic Risk Buffer's (SyRB) design logic. The EBF argues that these risks are inherently bank-specific. Therefore, they are more suitably addressed under the existing Pillar 2 framework, which allows for tailored, individual bank assessments and capital requirements, rather than a broad, systemic buffer. A climate SyRB also risks double counting capital already held under existing supervisory requirements. Furthermore, it risks penalizing industries and areas most in need of transition and resilience building. Such a buffer could inadvertently hinder necessary investments in sustainable practices and infrastructure. The EBF stresses that a nuanced approach is essential to avoid counterproductive outcomes and ensure effective risk management without stifling crucial economic shifts towards sustainability. If climate-related macroprudential tools are to be explored, the EBF insists the process must prioritize EU-wide alignment, risk sensitiveness, and clear activation criteria. It also requires robust, comparable, and available data sets. Any future framework must pass a clear proportionality test, carefully weighing the associated costs against the prudential benefits. This ensures that any implemented measures are effective, harmonized across the EU, and justified by their positive impact on financial stability. For a comprehensive understanding of the EBF's detailed position and arguments, interested parties are encouraged to read the full response document. This provides complete insights into their recommendations and concerns regarding the EBA's consultation on the Systemic Risk Buffer and climate risk implications for the banking sector. For further information or inquiries regarding the EBF's response and its implications, please contact their dedicated experts. Jānis Priekulis, Senior Policy Adviser for Sustainable Finance, can be reached at j.priekulis@ebf.eu. Additionally, Denisa Avermaete, Head of Sustainable Finance, is available at D.Avermaete@ebf.eu. They can provide detailed clarifications and additional context on the EBF's position. The European Banking Federation (EBF) serves as the unified voice for the European banking sector. It comprises national banking associations from across Europe, representing a broad spectrum of financial institutions. The EBF is deeply committed to fostering a thriving European economy. This commitment is underpinned by its dedication to establishing a stable, secure, and inclusive financial ecosystem, which is vital for sustained growth and prosperity throughout the continent. Furthermore, the EBF is dedicated to cultivating a flourishing society. It strives to ensure that financing is readily available to fund the aspirations and dreams of citizens, businesses, and innovators across Europe. By supporting a robust financial infrastructure, the EBF aims to empower individuals and enterprises, driving innovation and contributing to overall societal well-being and economic progress throughout the region. To stay informed and connected with the latest developments in the European banking sector, the EBF offers regular updates. They produce both a daily and a weekly newsletter, featuring European banking news and crucial updates from national banking associations across the continent. Interested parties can easily subscribe to these newsletters to receive timely information and insights directly from the EBF. The section for popular posts currently indicates that no data is available. This suggests that the platform might be new or undergoing updates, or perhaps there haven't been enough interactions to generate a list of trending articles yet. Users should check back later for potential updates on popular content. Among recent publications, the EBF has issued several key responses and views. These include their detailed response to the EBA consultation on the Systemic Risk Buffer for climate risk, which is the subject of this article. They also provided preliminary views on the Market Integration Package (MIP), demonstrating their engagement with broader financial market developments and regulatory initiatives. These publications reflect the EBF's active role. Other significant publications include the EBF's response to the EC Consultation on the Competitiveness of the EU Banking Sector, specifically addressing ESG aspects in questions 26 and 95. Furthermore, the EBF has called for more ambitious and structural simplification of the Taxonomy Alignment Assessment. These documents collectively highlight the EBF's ongoing efforts to shape financial regulation and promote a competitive, sustainable banking environment within the EU.