Macro-prudential supervision

The European Systemic Risk Board (ESRB) is designed to safeguard the soundness of the European financial system by undertaking macro-prudential supervision. The ESRB focuses on medium and long-term developments and makes an important contribution to crisis prevention. It also issues warnings and recommendations, and reports on risks and the creditworthiness of member states.

ESRB focuses on crisis prevention in the medium and long term

The ESRB plays an important role in crisis prevention and helps to prevent systemic risks in the EU. These risks may pose a serious threat to the adequate operation and the integrity of financial markets, or to the stability of the financial system in the EU. The ESRB focuses on medium-term and long-term developments rather than on emergency procedures for crisis management.

ESRB issues warnings and makes recommendations

The ESRB issues early warnings based on information provided by the national supervisory authorities and makes (binding) recommendations on risk mitigation to member states, European and national supervisory authorities, and the EU as a whole. Its warnings and recommendations are intended to mitigate systemic risks and to boost the financial sector’s resilience. The member states must ‘comply or explain’. In the case of non-compliance or an inadequate explanation, the ESRB is entitled to publish its warnings and recommendations. Its recommendations may be also be intended to encourage the EU member states and the European Supervisory Authorities (ESAs) to issue new rules and regulations. The ESRB monitors these warnings and recommendations together with the Ecofin council.

ESRB reports on risks and creditworthiness

Since 1 January 2011, the ESRB has issued regular reports on the risks and weaknesses in the financial system. Read more about the ESRB’s reports here. These reports address themes including the creditworthiness of euro-area member states, the increasing risks for the solvency of banks, and weakening economic growth.