The European Systemic Risk Board (ESRB) is responsible for macroprudential supervision within the European Union. At the end of 2011, the ESRB recommended that macroprudential authorities or bodies be established at the national level. Germany implemented this recommendation by creating the Financial Stability Committee.
The ESRB has the task of overseeing the entire financial system within the European Union. The ESRB contributes to containing systemic risks and preventing financial crises by means of its macroprudential suervision. It also contributes to the smooth functioning of the internal market, thereby ensuring that the financial sector is able to make a sustained contribution to economic growth. The Bundesbank and BaFin are represented on the ESRB, among others.
The ESRB can issue warnings or recommendations addressed in particular to the European Union as a whole, to EU member states, to European supervisory authorities (ESAs) or to national authorities. In 2011, for example, the ESRB recommended that member states designate an authority entrusted with the implementation of macroprudential policy (ESRB/2011/3). The Financial Stability Committee performs this function in Germany.
The ESRB monitors the implementation of recommended measures. Recipients inform the ESRB and the European Council of the actions they have taken. They also provide appropriate explanation for any inaction (“comply or explain” mechanism). Should the ESRB find that a recommendation has not been followed, or that any failure to act was unfounded, it will inform the European Council accordingly.
The General Board is the central decision-making body within the ESRB. Warnings and recommendations are approved with a two-thirds majority. Members of the General Board include the President and Vice-President of the ECB, the governors of the national central banks of all EU countries, the heads of the European supervisory authorities (EBA, EIOPA and ESMA), a high-level representative of each of the competent national supervisory authorities, a member of the European Commission, and the chair of the Economic and Financial Committee (EFC).
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ESRB recommendations that are relevant for Germany
| Recommendation number | Contents | Approval date | Addressee |
|---|---|---|---|
| ESRB/2021/10 | Medium-term vulnerabilities in the residential real estate sector | 2 December 2021 | Federal Ministry of Finance |
| ESRB/2020/12 | Identification of financial and non-financial entities by means of a legal entity identifier (LEI) | 24 September 2020 | BaFin |
| ESRB/2020/8 | Monitoring the financial stability implications of national measures in reaction to the Covid-19 pandemic and regular reporting to the ESRB | 27 May 2020 | Financial Stability Committee |
| ESRB/2020/7 and ESRB/2020/15 | Restriction of distributions during the Covid-19 pandemic | 27 May 2020 18 December 2020 | BaFin |
| ESRB/2020/6 | Liquidity risks arising from margin calls during the Covid-19 pandemic | 8 May 2020 | BaFin |
| ESRB/2019/18 | Exchange and collection of information for macroprudential purposes on branches of credit institutions having their head office in another member state or in a third country | 26 September 2019 | Financial Stability Committee, BaFin |
| ESRB/2016/14 [amended in ESRB/2019/3] | Closing real estate data gaps (ESRB/2016/14) | 28 November 2016 | AFS |
| ESRB/2015/2 | Assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures | 15 December 2015 | Financial Stability Committee, BaFin, Bundesbank |
| ESRB/2015/1 | Recognising and setting countercyclical buffer rates for exposures to third countries | 11 December 2015 | BaFin |
| ESRB/2014/1 | Setting countercyclical buffer rates | 18 June 2014 | BaFin |
| ESRB/2013/1 | Definition and achievement of intermediate objectives of macro-prudential policy and assessment of required instruments as needed | 4 April 2013 | Financial Stability Committee |
| ESRB/2012/2 | Monitoring and assessment of funding risks and funding risk management | 20 December 2012 | BaFin |
| ESRB/2011/3 | Establishment of a macroprudential mandate of national authorities and creating legal bases | 22 December 2011 | German government |
| ESRB/2011/2 | Monitoring risks of US dollar denominated funding and ensuring the availability of appropriate contingency plans | 22 December 2011 | BaFin |
| ESRB/2011/1 | Information about and monitoring of foreign currency loans | 21 September 2011 | BaFin, German government |