European Systemic Risk Board

 

SUMMARY OF:

Regulation (EU) No 1092/2010 on macro-prudential oversight of the financial system and the establishment of a European Systemic Risk Board

WHAT IS THE AIM OF THE REGULATION?

In the aftermath of the 2008 global financial crisis, the European Union introduced legislation on macro-prudential oversight of the financial system and establishing the European Systemic Risk Board (ESRB).

The ESRB is responsible for the macro-prudential oversight of the EU’s financial system and contributes to the prevention or mitigation of systemic risks in the EU as a whole or parts thereof. It identifies and discusses financial stability risks regardless of their origin.

It establishes the European Systemic Risk Board (ESRB) as part of the new European System of Financial Supervision (ESFS), which also includes:

The new supervisory architecture also includes a regulation that gives the European Central Bank (ECB) certain specific tasks to support the ESRB.

KEY POINTS

Mandate, objectives and tasks

The ESRB is based in Frankfurt am Main (Germany). It is responsible for monitoring and analysing risk in the financial system as a whole (also known as macro-prudential oversight). To achieve this, the ESRB in particular:

Organisation

The ESRB has the following structure:

The ESRB has a chair who represents the ESRB externally and two vice-chairs. The ECB provides analytical, statistical, logistical and administrative support to the ESRB by running the ESRB’s Secretariat.

Warnings and recommendations

In the event of significant systemic risks to its objective, the ESRB provides warnings and, where appropriate, issues recommendations for remedial action, including legislative initiatives. These warnings or recommendations are addressed in particular to:

ESRB recommendations

Addressees of recommendations must comply or provide an explanation for any inaction. If the ESRB decides that its recommendation has not been followed or that addressees have not provided adequate justification for their inaction, it confidentially informs the addressees, the European Parliament, the Council and the relevant ESAs.

The further evolution of the European surveillance system

As the financial crisis evolved and following the worsening sovereign debt crisis in the euro area in 2010-2011, the further integration of the euro area banking systems became necessary. This is why, based on the Commission’s roadmap for setting up a banking union, the European institutions created the following.

FROM WHEN DOES THE REGULATION APPLY?

It has applied since 16 December 2010.

BACKGROUND

For more information, see:

MAIN DOCUMENT

Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board (OJ L 331, 15.12.2010, pp. 1-11)

Successive amendments to Regulation (EU) No 1092/2010 have been incorporated in the original text. This consolidated version is of documentary value only.

RELATED DOCUMENTS

Council Regulation (EU) No 1096/2010 of 17 November 2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board (OJ L 331, 15.12.2010, pp. 162-164)

last update 10.07.2020