European Systemic Risk Board (ESRB)

The European Systemic Risk Board is an independent authority of the European Union responsible for macroprudential supervision over the European financial system. It is one of the building blocks of the European System of Financial Supervision (ESFS), which was created in response to the global financial crisis. The ESRB was created on the grounds of a regulation which entered into force on 16 December 2010. The main objective of the ESRB is to mitigate and prevent systemic risks to financial stability in the European Union. Such risks may result from both the interconnectedness between financial institutions and markets, as well as from macroeconomic and structural conditions. The ESRB may issue warnings and recommendations. It shall contribute to the smooth functioning of the internal market and thereby ensure a sustainable contribution of the financial sector to economic growth. The ESRB has its seat in Frankfurt am Main (European Central Bank).

The European Central Bank (ECB) and national central banks of Member States play an important role in the organization and functioning of the European Systemic Risk Board. The General Board – the decision-making body of the ESRB – is composed of the governors of central banks from all EU Member States and is chaired by the President of the European Central Bank. The ECB ensures the secretariat and provides analytical, statistical, logistical and administrative support to the ESRB. The organizational structure of the ESRB includes the following: the Steering Committee (supporting the decision-making process) and two advisory committees – the Advisory Technical Committee and the Advisory Scientific Committee.

What is the scope of the ESRB Recommendation on the macroprudential mandate of national authorities?

In January 2012 the European Systemic Risk Board (ESRB) published the Recommendation on the macroprudential mandate of national authorities (ESRB/2011/3) addressed to the Member States. In this Recommendation the ESRB indicated the necessity to establish an authority responsible for macroprudential supervision at the national level. The ESRB recommendation is composed of several sub-recommendations concerning the creation of a macroprudential authority, its objective, tasks, competences, instruments as well as its independence and accountability. The ESRB left to the discretion of the Member States the choice of the institution model; however, it emphasized that central banks should have a leading role in macroprudential supervision.

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