European Systemic Risk Board (ESRB)

European Systemic Risk Board was established by the Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November and is part of the European System of Financial Supervision.

European Systemic Risk Board was established on 16 December 2010 with seat in Frankfurt, Germany. European Systemic Risk Board has no legal personality and is supported by the European Central Bank in fulfillment of its mission on the basis of the 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. 

The mission of the ESRB is to contribute to the prevention or mitigation of systemic risks to financial stability in the Union that arise from developments within the financial system and taking into account macro-economic developments, so as to avoid periods of widespread financial distress.

Main tasks of the ESRB:

  • determining and/or collecting and analyzing all the relevant and necessary information,
  • identifying and prioritizing systemic risks,
  • issuing warnings where such systemic risks are deemed to be significant and, where appropriate, make those warnings public,
  • issuing recommendations for remedial action in response to the risks identified and, where appropriate, making those recommendations public, monitoring the follow-up to warnings and recommendations,
  • cooperating closely with all the other parties to the ESFS, international and national institutions.

The fulfillment of the tasks of the ESRB is also described as the macro-prudential oversight of the financial system of the EU. No other EU institution has fulfilled this role so far, which was considered as an important shortcoming in financial supervision. The ESRB should analyze and monitor interconnections between Member States and financial institutions, contagion channels, common behavior and common exposures to risks.

The General Board takes the decisions necessary to ensure the performance of the tasks entrusted to ESRB. The General Board consists of the following members with voting rights: the President and the Vice-President of the ECB, the Governors of the national central banks of the Member States, one member of the European Commission, the Chairpersons of the EBA, EIOPA and ESMA, chairs of the Advisory Technical Committee and the Advisory Scientific Committee. Members without voting rights are: high-level representative per Member State of the competent national supervisory authorities and the President of the Economic and Financial Committee.

The Chair of the ESRB is Mr Jean-Claude Trichet, President of the European Central Bank (ECB). The first Vice-Chair of the ESRB is Mr Mervyn King, Governor of the Bank of England. The members of the Steering Commiittee, which assist the ESRB by preparing the meetings of the ESRB General Board, are the president and vice-president of the ESRB, governors Marek Belka (Poland), Mario Draghi (Italy), Athanasios Orphanides (Cyprus) and Axel Weber (Germany), chairs of the EBA, EIOPA and ESMA, chair of the EFC and chairs of the advisory committees (ATC and ASC).

Website of the ESRB: www.esrb.europa.eu 

Update: May 25, 2011