In order to ensure the stability of the European financial system, in 2010 the European Systemic Risk Board (ESRB) was established, as the body responsible for macro-prudential oversight of the financial system in the European Union. In line with the main objectives described in its mandate, the Committee aims to contribute to the prevention or mitigation of systemic risks and the functioning of the internal market, thereby ensuring a sustainable contribution to economic growth of the financial system. In order to meet interim objectives of macro-prudential policy or correct any other imbalances identified in the European financial system, the ESRB may issue recommendations and warnings in macro-prudential supervision to all Member States of the European Union. According to the principles developed at the ESRB, macro-prudential policy aims at safeguarding final financial system as a whole, including strengthening financial system resilience and reducing the accumulation of systemic risks. Establishing the macro-prudential policy strategy on intermediate objectives and macro-prudential instruments is based on assessments made by the competent authorities in the national macro-prudential supervision, analyzes that take into account the specifics of each financial system separately. 

The ESRB is part of the European System of Financial Supervision (ESFS), the purpose of which is to ensure supervision of the Union’s financial system.

Besides the ESRB, the ESFS comprises:

  • the European Banking Authority (EBA);
  • the European Insurance and Occupational Pensions Authority (EIOPA);
  • the European Securities and Markets Authority (ESMA);
  • the Joint Committee of the European Supervisory Authorities (ESAs);
  • the competent or supervisory authorities in the Member States as specified in the legislation establishing the three ESAs.

New European Union (EU) prudential rules for banks entered into force on 1 January 2014. These rules, which are set out in the Capital Requirements Directive (CRD) and Capital Requirements Regulation (CRR), give the macro-prudential authorities in the EU a new set of policy instruments to address financial stability risks more effectively.

The new rules foresee several roles for the ESRB, ranging from providing guidance (for instance, on the counter-cyclical capital buffer) to issuing opinions and recommendations on specific macro-prudential measures notified by national authorities.

More information regarding the recommendations issued by the ESRB and the European macro-prudential policy framework can be found at: