The paper presents a novel formal model of the active buffer of working memory. The model uses synchronic oscillations in order to bind an item and its corresponding context into one representation, while asynchronic oscillations allow the model to maintain several separate representations. Due to bindings, the model exerts proper control over the buffer’s contents, as demonstrated by effective rejection of distractors. Most importantly, the model predicts an inherent limitation in WM capacity that arises from the trade-off between the number versus the stability of representations bound by oscillations, which depends on the strength of lateral inhibition present among oscillating items. The systematic variation in inhibition leads to exact replication of the capacity distribution observed in a large sample of participants, as well as to prediction of a few novel, capacity-related experimental effects.