Macro-prudential supervision

The European Systemic Risk Board (ESRB) conducts macro-economic surveillance to safeguard the stability of the European financial system. It is concerned with developments in the medium and long term and is an important factor in crisis prevention. It also issues warnings and makes recommendations and reports on risks and the creditworthiness of member states. The President of the European Central Bank will chair the ESRB until the end of 2015.

ESRB concerned with crisis prevention in medium and long term

The ESRB plays an important role in crisis prevention and the prevention and mitigation of systemic risks in the EU. It oversees risks that can seriously threaten the smooth operation and integrity of the financial markets or the stability of the EU financial system in whole or in part. It takes into account macro-economic developments and contributes to the smooth functioning of the internal market. It thereby ensures a sustainable contribution of the financial sector to economic growth. The ESRB is concerned with medium and long-term developments rather than with emergency procedures for crisis management.

ESRB issues warnings and makes recommendations

On the basis of information provided by national supervisors, the ESRB issues early warnings and (obligatory) recommendations to member states, European and national supervisory authorities, the European Commission and the EU as a whole to address the risks. The warnings and recommendations are intended to reduce systemic risks and strengthen the resilience of the financial sector. The member states have an obligation to adopt the recommendations or explain why they will not. If a member states inadequately explains why it has not followed up a recommendation, the ESRB can make its warnings and recommendations public. Its recommendations can also be directed at encouraging new regulations in the EU, member states and European Supervisory Authorities (ESAs). The ESRB monitors the warnings and recommendations together with the Ecofin Council.

European Central Bank provides chair and members of the ESRB

The President of the European Central Bank (ECB) will chair the ESRB until the end of 2015. The ESRB's chair will then be appointed in accordance with rules based on an evaluation of the ESRB Regulation to be carried out at the end of 2013. The members of the ESRB's General Board, steering committee and technical committee are also drawn from the ECB, which also provides the secretariat. A member of the Commission participates in the ESRB to help establish a link between macro-economic and financial surveillance in the EU.

ESRB reports on risks and creditworthiness

Since 1 January 2011, the ESRB has regularly reported on risks and weaknesses in the financial system. More about the ESRB's reports.

Themes considered in the ESRB's reports include: the creditworthiness of euro area member states, the increasing risks to bank solvency and reduced economic growth. The ESRB has also issued publications on: Envisaged scoreboard indicators on the supervision of macro-economic imbalances relevant for the stability of the financial market: Views of the ESRB on the Envisaged Scoreboard Indicators Relevant for Financial Market Stability

The provision and collection of information for the macroprudential oversight of the financial system within the Union. The decision of the ESRB  to contribute to the prevention or mitigation of systemic risks to financial stability in the EU: Macro-prudential mandate of national authorities. An authority designated in national legislation must be entrusted with the conduct of macro-prudential policy. In the ESRB's opinion, this authority should preferably be the European Central Bank. The legislation should specify the decision-making process of the governing body of the macro-prudential authority.