# kaal:claim:2061166-006

**Claim.** Mutual recognition of countercyclical capital buffers hollows out the national discretion the Commission proposal appears to grant: the financially strongest Member States with the largest financial sectors will effectively set the buffer size for smaller Member States whose institutions do business there.

**Type.** mechanism  **Support.** argued

**Holds when.**

- countercyclical buffers up to the 2.5 percent mutual recognition ceiling
- institutions with branches or subsidiaries in the buffer-setting Member State

**Source quote.**

> Therefore, the financially stronger Member States with the largest financial sectors may dictate the size of countercyclical buffers for smaller Member States, thereby practically reducing any proposed national discretion.

**From.** Christoph K. Henkel, Wulf A. Kaal, *Contingent Capital in European Union Bank Restructuring* (2012), 3. Revisions of the Capital Requirements Directives, page 25

**Cite as.** Christoph K. Henkel, Wulf A. Kaal, Contingent Capital in European Union Bank Restructuring (2012). SSRN: https://ssrn.com/abstract=2061166

**Verify.** sha256 of source PDF `43625ea260d0fc045e86d3435df50c9d0ca4abf8542e6085a6165be6653b4a7b` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Henkel%20and%20Kaal%20-%202012%20-%20Contingent%20Capital%20in%20European%20Union%20Bank%20Restructuring.pdf

**Failure mode.** Mutual recognition collapses national buffer discretion  (family: jurisdictional-conflict)

**Topics.** institutional-design

**Keywords.** countercyclical-buffer, mutual-recognition, crd-iv, national-discretion, harmonization

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.