European Systemic Risk Board (Regulation)

Since the onset of the financial crisis the EU Financial Market Supervision, which is still very nationally-oriented, is up for discussion. Now, the Commission proposes that the ESRB is to monitor the stability of the entire European financial system. Moreover, three European Supervisory Authorities are to ensure an improved prudential supervision of single financial institutions.


With the ESRB a Community body is to be established in order to monitor systemic risks at European level, which is reasonable. Also the planned cooperation with the International Monetary Fund (IMF) and the Financial Stability Board is to be welcomed. It is equally appropriate that the warnings and recommendations to be made by the ESRB are non-binding and normally not to be public. However, the composition of the ESRB is problematic because it is accompanied by a conflict of interest for the representatives of national central banks, the European Supervisory Authorities and the EU Commission.