COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the mission and organisation of the European Systemic Risk Board (ESRB)
Date: 2014-08-08
Institutions: European Commission
Subjects: EU office or agency, Economic and Monetary Union, economic stabilisation, financial control, financial market, operation of the Institutions













EUR-Lex - 52014SC0260 - EN











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52014SC0260

COMMISSION STAFF WORKING DOCUMENT Accompanying the document REPORT TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the mission and organisation of the European Systemic Risk Board (ESRB) /* SWD/2014/0260 final */









Contents
1..... Introduction.. 3
2..... Mandate,
Powers & Tools. 4
2.1.     Background. 4
2.1.1..... The
regulatory framework. 4
2.1.2..... Warnings
and Recommendations. 6
2.1.3..... Other
analytical work. 7
2.2.     Assessment 7
2.2.1..... Focus. 7
2.2.2..... Binding
or non-binding recommendations. 7
2.2.3..... Timeliness. 8
2.2.4..... Addressees. 8
2.2.5..... Transparency. 9
3..... Structure
& Governance. 9
3.1.     Background. 9
3.1.1.       Structure. 10
3.1.2.       Governance. 10
3.2.     Assessment 15
3.2.1.       Organisational identity. 15
3.2.2.       Decision-making process. 16
3.2.3.       Perspective of the ESRB.. 16
3.2.4.       Advisory Committees. 17
4..... Stakeholder
Management, accountability & Communications. 17
4.1.     Background. 17
4.2.     Assessment 18
5..... Cooperation
and interaction between the ESRB (macro level) and the ESAs (micro level) 18
5.1.     Background. 18
5.2.     Assessment 20
6..... Data.. 21
6.1.     Background. 21
6.2.     Assessment 21
ANNEX I                                                                                                                           
24
ANNEX II                                                                                                                         
25

1.         
Introduction 

The European Systemic Risk Board (ESRB) was
established in 2010 as a component of the new European System of Financial
Supervision (ESFS), along with the European Banking Authority (EBA), the
European Securities and Markets Authority (ESMA) and the European Insurance and
Occupational Pensions Authority (EIOPA) (together the European Supervisory
Authorities (ESAs)).
Its creation, amidst an epochal financial
crisis, came as a result of the 2009 de Larosière Report[1] aimed at strengthening
European supervisory arrangements in order to better protect citizens and
rebuild trust in the financial system. The crisis had exposed shortcomings in
the micro-prudential supervision of individual institutions, and deficiencies
in the relationships between national supervisors; but also a lack of focus on
the degree of interdependence within the financial sector and more generally on
systemic risks that threaten financial stability (and therefore the 'real
economy'). The ESRB was created as the EU body charged with macro-prudential
oversight. Its role is to contribute to the smooth functioning of the internal
market through the prevention and mitigation of systemic risks to EU financial
stability by means of ex ante warnings and recommendations for action. 
The Union macro-prudential oversight of the
financial system is an integral part of the overall supervisory arrangements in
the Union as the macro-prudential aspect is closely linked to the
micro-prudential supervisory tasks attributed to the ESAs. The ESRB was
mandated to contribute directly to an integrated Union supervisory structure
necessary to promote timely and consistent policy responses among the Member
States, thus preventing diverging approaches and improving the functioning of
the internal market.
Article 20 of the Regulation establishing
the ESRB[2]
(the "ESRB Regulation") foresees a review process as regards the
mission and organisation of the ESRB, in particular, the modalities for the
designation or election of the Chair of the ESRB. Pursuant to Article 5(1) of the ESRB Regulation, the ECB President
is appointed as ESRB Chair for a first term of five years following the entry
into force of the Regulation i.e. 16 December 2010. Pursuant to the ESRB
Regulation, for the subsequent terms, the Chair of the ESRB shall be designated
in accordance with the modalities determined on the basis of the review.
A review clause is also included in Article 8 of the second Regulation on the
ESRB (the "ECB Regulation")[3],
which defines the modalities of the ECB’s support to the ESRB. 
Apart from first-hand experience through
its participation as a member of the ESRB General Board and other ESRB
governing or advisory bodies, the Commission’s assessment, as outlined in this review
report, draws on various sources. First, the Commission analysed evidence from
the Public Hearing on the ESFS review on 24 May 2013. Second, the Commission
assessed the feedback it received from the consultation process, which was held
between 26 April and 31 July 2013. This process comprised a public consultation
and a targeted consultation including more detailed and technical questions
directed at the ESAs, national authorities, relevant institutions and agencies
and key stakeholders. The Commission received 137 responses in total (94 to the
public consultation and 43 to the targeted consultation). Third, the Commission
considered the self-assessment provided by the ESRB[4] as well as the ESAs Joint Opinion on the review of the ESRB[5]. In
addition, the Commission took into account other studies and reports on the matter
presented by the IMF[6].
Finally, the study commissioned by the European Parliament (EP)[7] on the ESRB review and
the EP's resolution with recommendations to the Commission on the ESFS review[8] (hereinafter the EP Resolution) and the preceding discussions
were carefully considered. Drawing on input from these various external sources
– hereafter referred to simply as “stakeholders” – the Commission has proceeded
with the assessment required in the relevant legislation. 
The present Staff
Working Document accompanies the report from the Commission to the European
Parliament and the Council on the mission and organisation of the European
Systemic Risk Board (ESRB). It covers the following aspects: the ESRB mandate, powers
and tools; the structure and governance arrangements; the stakeholder management, accountability and
communications; the cooperation and interaction between
micro and macro-prudential policy; the issue of data access.

2.         
Mandate, Powers & Tools
2.1.           
Background
2.1.1.                                  
The regulatory framework

The mandate of the ESRB is defined in
Article 3(1) of the ESRB Regulation, which states that “The ESRB shall be
responsible for the macro-prudential oversight of the financial system within
the Union in order 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 macroeconomic developments, so as
to avoid periods of widespread financial distress. It shall contribute to the
smooth functioning of the internal market and thereby ensure a sustainable
contribution of the financial sector to economic growth”. This constitutes the
ESRB's competencies (with implicit provisions also in Article 2, which includes
the definitions). 
Its powers and tools are listed in Article
3(2) of the ESRB Regulation, and further clarified in Articles 15-19 and the
relevant recitals of the ESRB Regulation. The duties of the ESRB are:
a)     
Determining and/or collecting and
analysing all the relevant and necessary information, for the purposes of
achieving the objectives described in paragraph 1;
b)     
Identifying and prioritising systemic
risks;
c)     
Issuing warnings where such systemic
risks are deemed to be significant and, where appropriate, making those
warnings public;
d)     
Issuing recommendations for remedial
action in response to the risks identified and, where appropriate, making those
recommendations public
e)     
When the ESRB determines that an
emergency situation may arise pursuant to Article 18 of Regulation (EU) No
1093/2010, of Regulation (EU) No 1094/2010 and of Regulation (EU) No 1095/2010
issuing a confidential warning addressed to the Council and providing the
Council with an assessment of the situation, in order to enable the Council to
assess the need to adopt a decision addressed to the ESAs determining the
existence of an emergency situation;
f)       
Monitoring the follow-up to warnings and
recommendations;
g)     
Cooperating closely with all the other
parties to the ESFS; where appropriate, providing the ESAs with the information
on systemic risks required for the performance of their tasks; and, in
particular, in collaboration with the ESAs, developing a common set of
quantitative and qualitative indicators (risk dashboard) to identify and
measure systemic risk;
h)     
Participating, where appropriate, in the
Joint Committee;
i)       
Coordinating its actions with those of
international financial organisations, particularly the IMF and the FSB as well
as the relevant bodies in third countries on matters related to macro-prudential
oversight;
j)       
Carrying out other related tasks as
specified in Union legislation.
k)     
In the framework of the public
consultation, most respondents found the mandate appropriate, in the sense that
it was sufficiently broad to cover most factors possibly creating systemic risk
and that it allowed for sufficient freedom to further interpret the concept of
systemic risk, which was a welcome flexibility. When comments were made, they
were often referring to the substance of previous ESRB warnings or recommendation
(critical or supportive), rather than on the mandate itself. A few respondents
supported an explicit advisory role in the design of financial regulation given
its impact on systemic risk.

2.1.2.                                  
Warnings and Recommendations

The ESRB can issue warnings and recommendations.
According to Article 16(1) of the ESRB Regulation, "When significant risks
to the achievement of the objective in Article 3(1) are identified, the ESRB
shall provide warnings and, where appropriate, issue recommendations for
remedial action, including, where appropriate, for legislative
initiatives."
So far, the ESRB has issued seven public
recommendations[9]
(and no public warnings):
·        
Recommendation on lending in foreign
currencies (OJ C 342, 22.11.2011, p. 1) 
·        
Recommendation on the macro-prudential
mandate of national authorities (OJ C 41, 14.2.2012, p. 2)
·        
Recommendation on US dollar funding (OJ C 72,
10.03.2012, p. 1)
·        
Recommendation on funding of credit
institutions (OJ C119, 25.4.2013, p. 1)
·        
Recommendation on money market funds (OJ C
146, 25.5.2013, p. 1)
·        
Recommendation on intermediate objectives and
instruments of macro-prudential policy (OJ C 170, 15.6.2013, p. 1)
·        
Recommendation on guidance for setting
countercyclical buffer rates (ESRB/2014/1; 30.06.2014).
The difference between a warning and a
recommendation is not explained by the ESRB Regulation[10], although the
distinction is important because the adoption procedure requires different
majorities (simple majority for a warning, two-thirds majority for a
recommendation). Originally, the warning had been seen by legislators as a
first possible step, which would be followed by a recommendation only if
necessary. The fact that the ESRB has issued solely recommendations, which is
the most powerful tool, may be explained by the wish to immediately state the
problem and the solution and by the stricter 'comply or explain' procedure
foreseen for recommendation. 
In addition to warnings and recommendations
the ESRB relied also on 'soft powers', such as communication through letters
and other channels with relevant interested parties. 

2.1.3.                                  
Other analytical work

In addition to issuing recommendations, the
ESRB conducted research into and assessments of sources of systemic risk. These
relate notably to the linkages and potential channels of contagion within the
EU financial system; the shadow banking sector and securities financing
transactions; the macro-prudential aspects of draft EU legislation, real
estate, etc. That work has been carried out through the Advisory Technical
Committee, and the Advisory Scientific Committee and the various sub-groups created under these two bodies[11]. The work on
interconnectedness has been particularly praised by stakeholders. The ESRB –
together with the ESAs – has been examining this issue in relation to two
specific market segments, namely interbank interconnectedness and contagion in
the credit default swap (CDS) market. Further work could provide more insights
regarding systemic fragility and resilience.
In line with Article 3(2)(g) of the ESRB
Regulation, the ESRB has also developed a Risk Dashboard, which was first
published in September 2012. This
dashboard is produced with the close involvement of the ECB and in cooperation
with the three ESAs, and is one of the inputs considered by the General Board
in its discussions on risks and vulnerabilities within the financial system.

2.2.           
Assessment
2.2.1.                                  
Focus

The majority of stakeholders deemed the
ESRB broad mandate as defined in the ESRB Regulation appropriate.
Notwithstanding its cross-sectorial mandate, the ESRB has so far devoted most of
its attention and activities to the banking sector. A
number of stakeholders pointed to a certain banking bias in ESRB output. 
However, a certain focus on banks is not
surprising, considering that the ESRB was established in the middle of a
crisis, in which mainly banks were involved, while the insurance sector
experienced relatively few shocks. The banking bias could also derive from the
ESRB governing bodies' composition, which relies mainly on central banks (see
3.2.3.).

2.2.2.                                  
Binding or non-binding recommendations

The ESRB may only issue warnings and
recommendations which are non-binding but to which an 'act or explain mechanism'
applies. The ESRB Regulation imposes that addressees “shall communicate to the
ESRB and to the Council the actions undertaken in response to the
recommendation and shall provide adequate justification for any inaction”
(Article 17 of the ESRB Regulation). A few stakeholders have expressed some
reservations vis-à-vis the “act or explain mechanism”. Such criticisms were
already voiced during the drafting of the ESRB regulatory proposal. Some stakeholders
regretted that recommendations were not followed more thoroughly by addressees.
However, no stakeholders made concrete proposals to move beyond the current
non-binding nature of the ESRB warnings and recommendations, given in
particular the legal complexity that such a change would entail. Some
respondents highlighted that improvement could be brought by increased
transparency (i.e. systematically rendering public the warnings and recommendations),
and by generally increasing the reputation of the ESRB and public awareness
about its work.
The ESRB has itself highlighted the
importance of monitoring compliance to its recommendations by publishing a
handbook, which provides guidance on the steps that are to be followed in order
to carry out an assessment of the implementation of ESRB recommendations. These
steps include creating assessment teams; collecting information on addressee
compliance; assessing addressee compliance; interacting with addressees;
drafting the follow-up report for the General Board decision-making; and
communicating the results of assessments. 

2.2.3.                                  
Timeliness

The ESRB has been designed with the purpose
of providing early warnings on possible future negative developments. It does
so by analysing risks, as possible triggers of these negative developments. In
that framework, timeliness of warnings and recommendations is essential. Being
able to detect risks well in anticipation is a key feature of any efficient
early warning system.
However, many stakeholders highlighted the
fact that assessing the timeliness of the ESRB warnings and recommendations is
made difficult given its inception in the middle of a crisis. The ESRB was
established in a crisis period, when risks were crystallising and it would be
speculation to determine whether the ESRB would have acted on time and would
have been able to prevent the crisis from occurring. Similarly, for the cases
where the ESRB has provided warnings and recommendations to avoid future negative
developments, the effect of such warnings and recommendations may have been
clouded by the environment of an existing crisis. 
Some stakeholders
noted that the ESRB could rely more on other instruments of influence, such as
letters and reports. These would not include the legalistic language and
constraints of an official recommendation or warning, they can be adopted
earlier in the process and provide more flexibility as regards the message.
Despite their lack of formality, these instruments carry a significant weight,
as they are fed into discussion at other policy levels. They could be a way to
reinforce the early warning function. 

2.2.4.                                  
Addressees

Article 16(2) of the ESRB Regulation states
that “Recommendations may also be addressed to the Commission in respect of the
relevant Union legislation.”. This provision has been questioned by a few
stakeholders who pointed that this could be interpreted as impinging on the
exclusive competence of the Commission to propose legislation. However
recommendations are non-binding and the Commission keeps its full autonomy to
table a proposal or not. The Commission continuously receives input from
various stakeholders, and organises consultations itself to collect the views
of these stakeholders. Yet many stakeholders expressed a preference to advance
the involvement of the ESRB to the earliest stages of the process. Late
interventions, as have taken place in the CRD IV/CRR negotiations whereas
the regulatory proposals were already discussed by the co-legislators can affect
the serenity of the legislative debate. Such late intervention could be avoided
by foreseeing an early input of the ESRB[12].

2.2.5.                                  
Transparency

The ESRB has been designed with the desire
to preserve some confidentiality of its warnings and recommendations. The
confidentiality principle has been embedded in the ESRB process given the
concern that a warning or recommendation could create adverse market reactions
and become self-fulfilling following its publication. The procedure to make a
warning or recommendation public is relatively strict. Article 18(1) of the
ESRB Regulation states that "The General Board shall decide on a
case-by-case basis, after having informed the Council sufficiently in advance
so that it is able to react, whether a warning or a recommendation should be
made public. Notwithstanding Article 10(3), a quorum of two thirds shall always
apply to decisions taken by the General Board under this paragraph". The difficulty
arises from the two-thirds majority and the need to inform the Council, the
latter obligation causing sometimes delays. The procedure foreseen to make
warnings and recommendation public was mentioned by some stakeholders as
potentially excessive.
Furthermore, an inconsistency may be
observed in the ESRB Regulation which provides in Article 16(4) that "In
order to enhance the awareness of risks in the economy of the Union and to
prioritise such risks, the ESRB, in close cooperation with the other parties to
the ESFS, shall elaborate a colour-coded system corresponding to situations of
different risk levels.". The inconsistency is that such colour-coded
announcement of the risk level is incompatible with the possibility of issuing
confidential warnings and recommendations. If such confidential warnings
highlighting an increase of risk had to be issued, either the colour would have
to be adapted to reflect this, and the confidentiality would be lost, or the
colour would be kept unchanged, and the colour-coded system would lose its
purpose, plus be exposed to the accusation of having misled the public if the
warning materialises.

3.         
Structure & Governance  
3.1.       Background

The review of the ESRB by the European
Parliament and the Council shall comprise the ESRB's organisation and shall in
particular include the modalities for the designation or the election of the
Chair[13].
Moreover, the conferral of specific tasks concerning the functioning of the
ESRB on the ECB (i.e. provision of analytical, statistical, administrative and
logistical support) is subject to review[14].
The framework for the ESRB's structure and governance is laid down in the ESRB
Regulation, the ECB Regulation, the Rules of Procedure of the ESRB[15], the Code of Conduct
of the ESRB[16]
and the ESRB Decision on the Advisory Scientific Committee[17].

3.1.1.     
Structure

Though established as an "independent
body", unlike the ESAs, the ESRB has neither legal personality nor its own
budget[18].
It has its seat in Frankfurt am Main[19].
The ESRB receives analytical, logistical, statistical and administrative
support from the ECB, which bears the respective budgetary cost. The ECB
provides the support notably by ensuring the human and financial resources for
the fulfilment of the ESRB Secretariat's tasks[20].
ESRB members shall perform their duties
impartially and solely in the interest of the Union as a whole when participating
in the activities of the General Board and of the Steering Committee or when
conducting other activities relating to the ESRB. They are not permitted to ask
for, or take instructions from Members States, the Union institutions or other
public or private bodies and these bodies must not seek to influence ESRB
members on the performance of their tasks[21].

3.1.2.     
Governance

The ESRB is composed of a Chair, a General
Board, a Steering Committee, a Secretariat, an Advisory Technical Committee
(ATC) and an Advisory Scientific Committee (ASC).
Chart: ESRB Governance[22]
Chair and Vice-Chairs
The ESRB is represented externally by the
Chair[23]
who also presides at the meetings of the General Board and the Steering
Committee. Since its establishment, the ESRB has been chaired by the President
of the ECB. The ECB President's term will end five years after the entry into
force of the ESRB Regulation, i.e. on 16 December 2015. Pursuant to the ESRB
Regulation, the modalities for the designation or election of the Chair for the
subsequent terms shall be determined on the basis of the review.
The ESRB has a first and a second Vice
Chair[24],
who preside at the General Board and/or the Steering Committee when the Chair
is unable to participate in a meeting. The first Vice-Chair is elected by and
from the ECB General Council for a term of five years and may be re-elected
once[25].
The second Vice-Chair is the Chair of the Joint Committee of the ESAs and
consequently one of the Chairpersons of the ESAs.
The General Board
The General Board[26] is the main
decision-making body of the ESRB. It is composed of members with and without
voting rights. Members with voting rights are the President and the
Vice-President of the ECB, the Governors of the national central banks, a
member of the European Commission, the Chairpersons of each of the ESAs, the
Chair and the two Vice-Chairs of the Advisory Scientific Committee and the
Chair of the Advisory Technical Committee. Members without voting rights
comprise one representative per Member State of the national supervisory
authorities (on a rotating basis depending on the item discussed, unless a
common representative has been agreed on) and the President of the Economic and
Financial Committee (EFC).
Following the accession of Croatia to the European Union, the General Board has in total 67 members, 38 of whom have
voting rights.
Representatives of national supervisory
authorities shall attend as observers, where they have not been designated as
the national representative for an agenda item[27].
Moreover, high-level representatives from international financial organisations
whose activities are directly related to the ESRB may be invited to attend the
General Board's meetings where appropriate[28].
In general, decisions of the General Board
are taken by a simple majority of members with voting rights present at a
meeting. However, the General Board requires a quorum of two-thirds of the
members with voting rights. Each member with a voting right has one vote. In
case of a tie, the Chair has the casting vote. If the quorum is not met, the
Chair may convene an extraordinary meeting at which decisions may be taken with
a quorum of one-third. A majority of two-thirds of the votes cast is required
to adopt a recommendation or to make a warning or recommendation public.
Decisions may be taken by written procedure, unless at least five members of
the General Board with voting rights object[29].
Ordinary meetings of the General Board take
place at least four times a year. Extraordinary meetings may be convened at the
initiative of the Chair or at the request of at least one third of the members
of the General Board with voting rights.
The Steering Committee
The role of the Steering Committee[30] is to assist the
decision-making process by preparing General Board meetings, reviewing the
documents to be discussed and monitoring work progress. The agenda for meetings
of the Steering Committee is drafted and sent to members for comments by the
ESRB Chair. 
The Steering Committee has 14 members. It is
composed of the ESRB Chair and Vice Chair, the ECB Vice-President, four other
members of the General Board who are also members of the General Council of the
ECB[31],
a member of the Commission, the Chairpersons of each of the ESAs, the
EFC-President and the Chairs of the Advisory Scientific Committee and of the
Advisory Technical Committee (in total 14 members).
Ordinary meetings of the Steering Committee
shall be convened at least quarterly before each meeting of the General Board[32].
The Secretariat
The Secretariat[33] is responsible for the
day-to-day business of the ESRB. This includes in particular the preparation of
ESRB meetings, the collection and processing of information, the preparation of
analyses, support to the ESRB in international cooperation on macro-prudential
issues and the support to the work of the other ESRB bodies[34].
The tasks of the Secretariat include[35]:
·        
acting
as the interface and facilitate cooperation within the ESRB and between the
ESRB, the European System of Central Banks, the other parties to the ESFS, and
other relevant institutions at national, European and international level and ensuring efficient
communication flows; 
·        
contributing
to defining and reviewing the overall macro- prudential framework of the ESRB; 
·        
performing
analysis and synthesis, preparing notes for discussion by the ESRB, supporting
the Steering Committee, taking into account ESRB members’ contributions and
identify issues for consideration; 
·        
building-up
expertise, in cooperation with the ESRB members, on macro-supervisory
instruments and evaluating macro- prudential instruments as a basis for
possible ESRB policy recommendations; 
·        
contributing
to the preparation and monitoring of the follow- up of warnings and
recommendations; 
·        
keeping
the records and documents of the ESRB, administer the ESRB’s website and deal
with the ESRB’s correspondence; and
·        
managing
the financial, material and human resources allocated by the ECB to the ESRB.
The Secretariat is managed by a Head[36] who receives
directions from the Chair and the Steering Committee[37]. The Head is appointed
by the ECB in consultation with the General Board[38]. Currently, the ESRB
Secretariat has 23 staff[39].
The Advisory Technical Committee and the Advisory Scientific
Committee
The Advisory Technical Committee and the
Advisory Scientific Committee provide advice and assistance on issues relevant
to the work of the ESRB at the request of the ESRB Chair. They are supported by
the ESRB Secretariat, whose Head participates in their meetings.

(a)          
The Advisory Technical Committee

The mandate of the Advisory Technical
Committee (ATC)[40]
is to contribute in the following areas[41]:
·        
Regular
reviews of financial stability conditions in the EU, including the detection of
systemic risks (such as advice on the draft regular reports produced by the
ECB);
·        
Analytical
and policy preparations for discussions in the Steering Committee and the
General Board on warnings and recommendations;
·        
Review
and possible development of macro-prudential policy instruments available to
the competent authorities of the Member States (regulatory mapping and
conduction of studies in this field);
·        
Monitor
macro-prudential policy decisions taken on national level and in third
countries;
·        
Other
tasks assigned to the ESRB by Union legislation (in particular preparation of
opinions on EU legislation where the legislation expressly requests the ESRB to
give recommendations).
The ATC mirrors the General Board and is
mostly composed of national central banks' and national supervisory
authorities' representatives. It has 64 members[42]. The ATC shall at
least meet four times a year[43].
It has sub-structures to provide specific technical support to its work[44]. Sub-structures
comprise the ATC Analysis Group (AWG) with four sub-groups[45], the ATC Instruments
Working Group (IWG) with five sub-groups[46],
the ATC Task Force on Stress Testing, the ATC Assessment Team of the Macro-prudential
Mandate Recommendation and the ATC Task Force on Central Counterparties.
Moreover, the ATC has joint sub-structures with the ASC (see below).

(b)         
Advisory Scientific Committee

The Advisory Scientific Committee (ASC)[47] contributes to the
work of the ESRB through analytical and consultative tasks. Analytical tasks
include contributing on potential improvements of analytical risk detecting
methodologies to and assessing potential impacts of risk materialisation and on
designing and calibrating effective macro-prudential policy tools. Consultative
tasks include reviewing macro-prudential strategies and operational frameworks.
At the request of the Chair, the ASC can suggest and contribute to special
analytical studies.
The ASC has 16 members (one Chair and 15
experts)[48]
and meets at least twice per year. Members are chosen on the basis of their
general competence and their diverse experience in particular in academic
fields or other sectors[49].
As at December 2013, the ASC has issued four reports since its inception[50].
The ASC had one working group (ASC Group on
Overbanking) and three Joint Expert Groups together with the ATC[51].

3.2.       Assessment 
3.2.1.       Organisational identity

As suggested by the High-Level Group of
Financial Supervision in the EU in February 2009, the ESRB has been set up
under the auspices and with the logistical support of the ECB[52]. As set out above,
ties with the ECB go beyond the external organisation and are also enshrined in
the ESRB's governance. This becomes most tangible in the dual role of the ECB
President as Chair of the ESRB and in the staffing of the ESRB Secretariat by
the ECB.
According to some stakeholders, the close
link with the ECB may present some drawbacks. The ESRB has not yet developed the
full identity of an autonomous body. The dual role of the ECB President, being
at the same time the ESRB Chair, may not have always facilitated the visible distinction
between the ESRB and the ECB. Thus, many stakeholders insisted on the need to
enhance the ESRB's autonomy, while allowing it to continue to rely on ECB
reputation and expertise.
Another issue, which was often raised in
the context of whether the ESRB's current set-up allows it to fulfil its
mandate in a sufficiently autonomous manner, are the resources allocated to the
ESRB, including in particular the staffing of its Secretariat which was
considered as under-resourced by a number of respondents (also with a view to
the ESRB's role in the context of CRD IV/CRR). 
On the other hand, the close ties with the
ECB have been considered by stakeholders as entailing a number of advantages,
which have contributed to the success of the ESRB's work so far. The current
structure allows the ESRB direct access to the ECB's monetary and
macro-prudential expertise. Moreover, as a newly created body, the ESRB is
deemed to have gained credibility from the ECB's reputation and the latter's
central role in the EU monetary system. Some stakeholders considered that the
potential for synergies between the ECB and the ESRB has not yet been fully
exploited. 
Against this
background, many stakeholders saw a case for enhancing the ESRB's autonomy
(e.g. at the staff level and budget) while at the same time preserving strong
ties with national central banks and the ECB, in particular with a view to
accessing analytical information. 
With regard to the designation or election of
the Chair, there is an explicit mandate for review in the ESRB Regulation, in
particular having in mind that the current mandate of the ECB President as
Chair of the ESRB will expire on 16 December 2015. In view of enhancing the
ESRB visibility while preserving strong links with the ECB, the possibility of
a two-tier managerial structure has been suggested. The ESRB would continue to
be chaired by the ECB President, but a new function of a full-time Managing Director
would be created. While the ECB President would continue to chair the ESRB General
Board, the highest decision-making body of the ESRB, the Managing Director
would be in charge of the day-to-day activity of the ESRB and could also
represent the ESRB in certain key fora, e.g. in the Economic and Financial
Committee (EFC) and/or the Financial Services Committee (FSC) and on the wider
international level (such as with an observer status in the Financial Stability
Board (FSB)). Appointing an "executive Chairperson" has also been
recommended in the EP Resolution.

3.2.2.     
Decision-making process

While there was overall agreement that the
General Board has generally functioned well as a forum for discussion, most
respondents to the consultation acknowledged a need for streamlining the
decision-making process. This could be achieved, for example, by reducing the
size of the General Board or by delegation/transfer of certain tasks, be it to
a new or an existing ESRB body (e.g. the ATC, the Steering Committee and/or the
Secretariat). Another significant parameter to be taken into account would be how
the ECB will organize itself for macro-prudential policies.

3.2.3.     
Perspective of the ESRB

Another issue which was addressed by a
number of stakeholders was whether the ESRB has a sufficiently broad
perspective. Notably, most central banks participating in the consultation had
a positive view on the composition of the General Board and the strong role of
central banks, which was considered as beneficial for the credibility of the
measures taken. However, a number of stakeholders pointed to a certain banking
bias in ESRB discussions and measures[53],
stemming inter alia from the relative over-representation of central banks and
asked for a more diverse perspective (including the point of view of e.g.
national macro prudential authorities and ministries of finance). This was also
raised with respect to the Secretariat. While it is true that the ESRB is
supposed to cover the entire spectrum of financial activities, any measures
taken with a view to broadening the perspective of the ESRB should respect the
objective of streamlining the decision-making process (see section 3.2.2.). An
option which could be explored in this respect could be members of the
decision-making body representing several authorities or Member States. Such an
approach could also help overcoming situations where the ESRB members are too
focused on the national dimension of financial stability. Such ‘national bias’
in the decision-making has been criticised by many stakeholders. 

3.2.4.     
Advisory Committees

On the ATC, the overall feedback given in
the consultation was positive although its large size was criticised. Regarding
the ASC, comments were more contrasted with some contributions calling for more
visible work and a closer link to the general ESRB agenda.

4.         
Stakeholder Management,
accountability & Communications 
4.1.       Background

The ESRB's role, to prevent or mitigate
systemic risks to EU financial stability through the macro-prudential oversight
of the financial system, necessarily involves a complex and interconnected
stakeholders landscape. Its position within the ESFS and its powers, which
include issuing warnings and recommendations to various addressees, means that
its communications strategy and delivery are critical to the successful
achievement of its objectives. There are also accountability and reporting
requirements set out in the Regulation to increase transparency to the
Parliament, Council (EFC), and the public. 
The ESRB Regulation[54] sets out a number of
responsibilities and tasks for the ESRB with regard to communications and
stakeholder relations. The ESRB should, inter alia: 
-         
In the preparation and communication of warnings
and recommendations, provide the EFC with timely policy advice and send the
texts of any warnings and recommendations as soon as they have been adopted[55];
-         
Issue, privately or publicly, warnings  of
systemic risk and recommendations for remedial action to Member States and / or the European Supervisory Authorities;
-         
Coordinate action with other bodies such as the
IMF and FSB.
The Regulation[56] also outlines the
obligations of the ESRB with regard to accountability and reporting:
-         
At least annually, and more frequently in
crises, the ESRB Chair appears before a hearing of the European Parliament and
Council to publish the ESRB annual report;
-         
The Parliament, Commission and Council may also
request that certain specific issues be examined by the ESRB;
-         
The Chair of the ESRB holds confidential oral discussions
at least twice a year and more often if deemed appropriate, with the Chair and
Vice-Chairs of the Economic and Monetary Affairs Committee of the European
Parliament on the on-going activity of the ESRB; 
-         
The European Parliament may request that the
Chair of the ESRB attends a hearing of the competent Committees of the European
Parliament.

4.2.       Assessment 

Accountability
The Parliament and Council have specific
roles and procedures with regard to ESRB accountability. Stakeholders generally
consider the ESRB to have fulfilled its obligations to report to the Parliament
in a satisfactory manner. According to some stakeholders, the creation of a new
function of a permanent Managing Director of the ESRB would be easier to hold
to account for the output and progress of the ESRB as distinct from the ECB. 
Stakeholder Management 
Stakeholders have voiced concerns about the
interaction between the ESRB and the EFC notably in respect of the timeliness
of transmission of documents, including input to the EFC-FST. There are also
issues with the lack of time given to EFC to form a proper policy response; and
the flows of information between the ESRB and EFC. While many of the procedural
problems have been addressed, there remains a fundamental issue with the high
level representation of the ESRB on the EFC. The absence of such representation
reduces the effectiveness of the ESRB's communication and advocacy and
therefore diminishes the body's influence on discussions of systemic risk at
EFC meetings. The appointment of a Managing Director of the ESRB who would
represent the ESRB in the EFC could help mitigate these problems. 
The ESRB's relations with the Commission
have also been mentioned. The interaction with the Commission on regulatory
issues has, in particular, been identified as an area for improvement. The ESRB
is independent of the Commission and is therefore free to comment on any matter
and undertake analysis leading to regulatory recommendations for the Commission
to review. The timing is critical, however, and intervention once legislative
proposals are already under discussion should always be very carefully
considered (see section 2.2.4.). 
The ESRB should also seek to work more
closely with international fora such as the FSB and the Basel Committee of Banking
Supervisors (BCBS), while avoiding the potential for duplication of work.
Communications 
Many stakeholders have highlighted that the
ESRB external communication could be enhanced. There have been efforts to
publicise more of the output of the ESRB, for example, the publication of
reports from the ASC, but more could be done to raise the public profile and
market impact of ESRB work. Here again the appointment of a full-time Managing
Director of the ESRB could play a role in enhancing the public profile of the
authority, as distinct from the ECB. 

5.         
Cooperation and
interaction between the ESRB (macro level) and the ESAs (micro level)
5.1.       Background

A smooth and effective cooperation between
the micro and macro pillars of the ESFS is critical for financial stability and
is essential to the good functioning of financial supervision. When the ESFS
was established, particular attention was paid to the articulation and
relationship between the ESAs and the ESRB. The ESRB is required ‘to cooperate
closely with all the other parties to the ESFS’[57]. Reciprocally, each
ESA is required to ‘cooperate regularly and closely with the ESRB' as well as
with the other ESAs[58].

Cross-membership was conceived as one of
the ways to ensure a smooth cooperation between the two pillars of the system.
The Chairs of the ESAs are voting members of the ESRB General Board[59] and participate in its
Steering Committee[60].
The Chair of the Joint Committee who is also the Chair of one of the ESAs
serves as the second vice Chair of the ESRB[61].
A representative of the ESRB participates as a non-voting member in the Board
of Supervisors of the ESAs[62].
An ESRB representative also participates as an observer in the Joint Committee
of the ESAs and in the sub-committees established by the Joint Committee (e.g.
Sub-Committee on Financial conglomerates)[63].
Cross-member ship is also ensured at technical level.
Beyond cross-membership, a number of
articles in the ESA and ESRB regulations relate to the proper interaction and
good cooperation between ESAs and ESRB. Good cooperation between the micro and
macro levels of the system is particularly important in the following areas:
-         
Sharing of information and access to data (See
dedicated chapter below);
-         
Analytical work and contribution to the
assessment of systemic risk[64];
The ESRB and the ESAs are required to exchange information on systemic risks,
and market developments, as necessary for the fulfilment of their tasks;
-         
Stress tests[65].
The ESAs must consult the ESRB in developing criteria for identifying and
measuring systemic risk and in developing an adequate stress testing regime;
and
-         
Implementation and effectiveness of ESRB
warnings and recommendations[66]
The ESAs are required to ensure a proper follow-up to ESRB warnings and
recommendations. When ESRB warnings and recommendations are addressed to
competent national authorities, the ESAs are required to use their powers to
ensure a timely follow-up.
Finally, the ESRB has been given the task to
determine that ‘an emergency situation may arise’[67]. Upon detecting the
existence of such a situation, the ESRB is required to issue a confidential
warning to the Council and to provide the Council with an assessment of the
situation. The Council, in consultation with the ESRB and the Commission, and
where appropriate, the ESAs, may adopt a decision addressed to the ESAs,
enabling the latter to use 'emergency powers' requiring competent authorities
to take the necessary action[68].


5.2.       Assessment 

The cooperation between ESAs and ESRB seems
to have functioned well. The feedback received from respondents was overall
positive. Cross-membership proved useful and cooperation at staff level was
broadly fruitful. Beyond the provision of statistical information and regular
analyses of risks and vulnerabilities in their respective sectors, the ESAs' staff
has played an active role in contributing to the work of the ESRB ATC and its
sub-committees, for example to important work streams on shadow banking and
interconnectedness (interbank and CDS). The cooperation with EBA on banking
issues was deemed particularly successful by many respondents. Reciprocally,
the ESRB staff has contributed to a number of ESAs working groups (e.g. the EBA
Stress Test Task force). 
-         
Access to data
(see dedicated Chapter 6)
-         
Analytical work:
A few respondents raised concerns on the risk of overlaps between ESRB and ESAs
work, in particular as regards risk-identification carried out by the ESRB and
work taking place under the auspices of the risk-subcommittee of the Joint
Committee. The risk-subcommittee produces a bi-annual cross sectoral risk
assessment report, which contributes to the ESRB risk identification process.
Two such assessments have been produced[69].
However the majority of stakeholders were broadly satisfied with the current
situation. The risk of potential overlaps should not necessarily be considered
an issue, the objective being rather to avoid 'blind spots' in order to protect
financial stability. More common output could be developed. The establishment
of a common risk dashboard would, in particular, be a welcome step forward in
that respect.  
-         
Stress Tests:
Until recently the ESRB has played only a limited role in this area. ESMA has
not yet established its stress test framework. Hence there has been little
cooperation between ESMA and ESRB in this area. EIOPA stress tests are
coordinated by the EIOPA Financial Stability Committee which has worked closely
with the ESRB. As regards banks stress testing, currently the ESRB plays a more
active role in the EBA EU-wide stress test and cooperates with the ECB to
provide the macroeconomic adverse scenario. It has established its own Stress
Test task force to this effect, involving the EBA. Such development should be
welcome. 
-         
Follow-up of ESRB warnings and
recommendations: It is too early to assess the role
of the ESAs in the follow-up of ESRB recommendations. To date, the ESRB has
issued three recommendations, which involve EBA in the follow-up, including the
recommendation on lending in foreign currencies. 

6.         
Data access
6.1.       Background

The protocol for the accessing and sharing
of data between the ESRB, ECB, the European System of Central Banks (ECSB) and
ESAs is set out in Article 15 of the ESRB Regulation and Article 5 of the ECB
Regulation. Details outlining the procedures for the collection and provision
of this data, both for the regular dissemination of aggregated information and
for ad hoc requests, are set out in the ESRB Decision of 21 September 2011
(ESRB/2011/6). This decision sets out the datasets that the ESAs transmit to
the ESRB on a quarterly basis and the processes by which any ad hoc requests
can be made and fulfilled. These regular datasets are in aggregate form and are
serviced from the ESAs and to the ESRB via the ECB Directorate General for
Statistics. 
Evidence suggests that processes for the
collection and provision of data, necessary for the ESRB to discharge its
functions under Article 3 of the ESRB Regulation, may not be fit for purpose
and could be made more efficient and effective. This is supported by feedback
from the public consultation, the ESRB's own review[70], and the Commission's
analysis. 

6.2.           
Assessment 

The ESRB, in order to achieve its
objectives, is empowered to determine, collect and analyse all relevant and
necessary information. The ESRB Regulation requires the close cooperation
between the ESAs, the ESCB, the Commission, national supervisory authorities,
national statistical authorities, and the ESRB. 
It was envisaged that the majority of
information requested for the ESRB to be able to discharge its functions, would
be in summary or aggregate form via the regular transmission of permanent
datasets from the ESAs, such that individual financial institutions cannot be
identified. This assumption has proved broadly correct. Where summary or
aggregate information is not available or available quickly enough, the ESRB Regulation
enables the ESRB to direct a request to the ESAs, ESCB, national supervisory
authorities or national statistical authorities. 
As regards the process for ad hoc requests,
it is subject to a detailed procedure set out in the ESRB decision of September
2011, which includes guidance on the rationale for requests, approval,
procedure (investigation and data collection). First, the 'investigation phase'
involves ESRB, ECB and ESAs examining the ad hoc request to determine the availability
of pre-existing data that could address the information requirements. Second,
the 'data collection phase'. The ESRB Secretariat submits a proposal for
following up the results of the investigation phase, via the ESRB Steering
Committee, to the General Board for approval. Upon approval, the request is
made to the relevant body, be it ESA, ESCB, international organisation etc. 
In circumstances where the ESRB feels that
more granular data is required, a separate approval process exists for
disaggregated ad hoc requests, which includes a further requirement for
approval from the appropriate ESA, and a test for justification and
proportionality[71],
in addition to the engagement with the ESA during the identification phase.  
Chart: Approval processes for ad hoc data requests
 Ad hoc request for firm-specific data from ESAs 
In general, the ESRB Regulation does allow
the ESRB access to the appropriate data i.e. that the ESRB's mandate and role
means that systemic risks identification and mitigation are its priority and
that therefore aggregate data is most important. It is also right that the ESRB
should continue to have access to firm specific data, on an ad hoc basis, where
necessary. 
However, the processes for accessing ad hoc
aggregate and firm-specific requests are considered as inefficient, the
approval process overly burdensome. There is significant scope for
streamlining. 
Two main problems with the processes for
accessing information have been identified: 
         
i.              
The process for the submission and approval of ad
hoc requests data is overly burdensome, slow and creates potentially
problematic time delays, reducing the ESRB's ability to produce timely warnings
and / or recommendations. When requests are sent to the ESCB for approval (via
the Statistics Committee), the request has already been approved by central
banks in the General Committee. This duplication of approval is unwieldy and
unnecessary.  
       
ii.              
The process for the approval of disaggregated,
firm-specific information is also burdensome and creates unnecessary delays. In
this case, the ESA is consulted in the investigation phase, approves via the
Chairperson's ex officio representation on the General Board, and
re-approves via the 'justification and proportionality' test.  
There have been efforts to better manage
and coordinate the sharing of data between the ESRB and other bodies. The
reticence of national supervisors to share disaggregated data with the ESRB has
caused problems in the past; the lengthy duplicative process for approval
reflects this. However, there have been steps taken to establish a confidential
system for the sharing of data. 
The agreement[72] of November 2011,
between the ESRB and ESAs set out certain provisions for improving the
conditions for securing confidential data, which included: use of encrypted
files in the ESRB document management system (DARWIN); limits on access to a
special area for the use of computers not connected to the wider ESRB / ECB
systems; strengthened rules on confidentiality. These changes have increased
the confidence that ESAs have in the dissemination of information and
firm-specific data to the ESRB. 
Furthermore, a Contact Group on Data was
established in 2012 to coordinate the collection and dissemination of data
between the ESAs, ESRB and ESCB. This body assists in the early stage of
planning ad hoc requests for data outside the regular information sharing
process. The early examination of requests, including an assessment of the data
sources and methodology proves useful in identifying improvements before the formal
approval process. However, since this also involves ESAs, for example, it is
conceivable that, in an ad hoc request to the EBA, there could theoretically be
three separate stages of ESA approval (formal and informal) before the request
is delivered and acted upon. 
Annex I
ESRB organisation[73]
Annex II
Members of the
ESRB Advisory Scientific Committee[74]
Marco Pagano (Chair)
University of Napoli Federico II, Naples
André Sapir (Vice-Chair)
Universite Libre de Bruxelles, Brussels
Martin F. Hellwig (Vice-Chair)
Max Planck Institute for Research on Collective Goods,
  Bonn
Viral V. Acharya
New York University Stern School of Business, New York
Leszek Balcerowicz
Warsaw
 School of Economics, Warsaw
Arnoud Boot
Universiteit van Amsterdam, Amsterdam
Markus K. Brunnermeier
Princeton University, Princeton
Claudia Buch
Institut für Wirtschaftsforschung Halle, Halle
Dario Focarelli
Associazione Nazionale Fra Le Imprese Assicuratrici
(ANIA – Italian Association of Insurance Companies)
Alberto Giovannini
Unifortune Asset Management SGR SpA, Milan
Daniel Gros
Centre for European Policy Studies, Brussels
Richard Portes
London
 Business School, London
Dirk Schoenmaker
Duisenberg School of Finance, Amsterdam
Ieke van den Burg
Former Member of the European Parliament
Charles Wyplosz
The Graduate Institute of Geneva, Geneva
Andreas Ittner
Österreichische Nationalbank, Vienna in representation
of the Advisory Technical Committee
[1]       The High Level Group on Financial Supervision (chaired by
Jacques de Larosière), Report, 25 February 2009; http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf.

[2]       Regulation (EU) No 1092/2010 of the European Parliament and
of the Council of 24 November 1010 on European Union macro-prudential oversight
of the financial system and establishing a European Systemic Risk Board (OJ L
331, 15.12.2010, p. 1).
[3]       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, p. 162).
[4]       ESRB, High-Level Group on the ESRB Review, Contribution to
the Review of the ESRB, March 2013; http://www.esrb.europa.eu/pub/pdf/other/130708_highlevelgroupreport.pdf?e913faa529f509c934cd484435ad13a8.
[5]       ESAs Joint Opinion – review of the
European Systemic Risk Board (ESRB, 17 December 2013, ESAs-2013-035; https://eiopa.europa.eu/fileadmin/tx_dam/files/publications/opinions/ESAs_opinion_on_the_ESRB_review.pdf)
[6]       European
Union: Publication of Financial Sector Assessment Program
Documentation—Technical Note on Macroprudential Oversight and the Role of the ESRB; 
IMF
Country Report No. 13/70; March 2013
[7]       European Parliament, Review of the New European System of
Financial Supervision (ESFS) – Part 2: The Work of the European Systemic Risk
Board (ESRB) (Authors: Samuel McPhilemy and John Roche (Oxford Analytica)), October 2013;              
http://www.europarl.europa.eu/RegData/etudes/etudes/join/2013/507490/IPOL-ECON_ET(2013)507490_EN.pdf.
[8]       European Parliament
resolution of 11 March 2014 with recommendations to the Commission on the European System of Financial Supervision (ESFS) Review (2013/2166(INL));    
http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P7-TA-2014-0202+0+DOC+XML+V0//EN&language=EN#top.
[9]       The report will obviously not mention or discuss any
confidential warning or recommendation, if any.
[10]     At some point, the difference between a warning and a
recommendation can be purely semantic. The sentence "you are driving too
fast" is a warning, the sentence "slow down" is a
recommendation, both clearly have the same meaning.
[11]     For a detailed overview on the sub-structures, see the chart in
Annex I to this Report.
[12]     In the case of the CRD IV/CRR process, early consultation was
impossible as the ESRB did not exist prior to 2011.
[13]     Cf. Article 20 read in conjunction with Article 5(1) of
the ESRB Regulation.
[14]     Cf. Article 8 of the ECB Regulation.
[15]     Decision of the European Systemic Risk Board of 20 January 2011
adopting the Rules of Procedure of the European Systemic Risk Board
(ESRB/2011/1) (OJ C 58, 24.2.2011, p. 4).
[16]        Decision of the European Systemic Risk Board of 25 March 2011
adopting the Code of Conduct of the European Systemic Risk Board (ESRB/2011/)
(OJ C 140, 11.05.2011, p.18).
[17]        Decision of the European Systemic Risk Board of 20 January 2011 on the
procedures and requirements for the selection, appointment and replacement of
the members of the Advisory Scientific Committee of the European Systemic Risk
Board (ESRB/2011/2) (OJ 39, 8.2.2011, p. 10).
[18]     Cf. Recital 15 of the ESRB Regulation.
[19]     Article 1(1) of the ESRB Regulation.
[20]     See Article 3 (1) of the ECB-Regulation. In 2012, the ECB
provided the ESRB with 56.5 full-time equivalent staff (of which 22 were
deployed in the Secretariat and the remaining 34.5 to other forms of support)
in 2012. The direct cost incurred by the ECB amounted to €7.3 million (not
including additional cost relating to other support services shared with the
ECB such as human resources, IT and general administration). See ESRB Annual
Report for 2012              
http://www.esrb.europa.eu/pub/pdf/ar/2012/esrbar2012en.pdf?7d146a5043df3f279aeb60f85f4427b2.
[21]     Article 7 of the ESRB Regulation.
[22]     Chart: Deutsche Bundesbank, The European Systemic Risk Board:
from institutional foundation to credible macroprudential oversight, in:
Monthly Report, April 2012, pp. 29-39 (updated with a view to the accession of Croatia).
[23]     For the Chair, see Article 5 of the ESRB Regulation.
[24]     See Article 5 of the ESRB Regulation. Currently, the first and
the second Vice-Chairs are Governor of the Bank of England Mark Carny and
Chairman of EIOPA Gabriel Bernadino.
[25]     See Article 5(2) of the ESRB Regulation. For the election see
Article 7 of the ESRB Rules of Procedure.
[26]     For the General Board, see in particular Articles 4(2) and
Articles 6 et seq. of the ESRB Regulation.
[27]     See Article 4(2) of the ESRB Rules of Procedure.
[28]     See Article 9(4) of the ESRB Rules of Procedure.
[29]     See Article 6(4) of the ESRB Rules of Procedure.
[30]     For the Steering Committee, see Article 4(3) and Article 11 of
the ESRB Regulation and Article 8 et seq. of the ESRB Rules of Procedure.
[31]     For the election of the four members see Article 8 of the ESRB
Rules of Procedure.
[32]     Article 11(2) of the ESRB Regulation.
[33]     For the Secretariat, see Article 4(4) of the ESRB Regulation,
Article 2 et seq. of the ECB Regulation and Article 14 et seq. of the ESRB
Rules of Procedure.
[34]     See Article 2 et seq. of the ECB Regulation.
[35]     Article 15 of the ESRB Rules of Procedure.
[36]     For the tasks of the Head see Article 15(1) & (2) of the
ESRB Rules of Procedure.
[37]     Article 4(1) of the ESRB Regulation.
[38]     Article 3(2) of the ESRB Regulation; see also Article 14(1) of
the ESRB Rules of Procedure.
[39]     Cf. Annual Report 2012 of the ECB;
http://www.ecb.europa.eu/pub/pdf/annrep/ar2012en.pdf.
[40]     For the Advisory Technical Committee, see Article 4(5) and
Article 13 of the ESRB Regulation and Article 13 of the ESRB Rules of
Procedure.
[41]     See Mandate of the Advisory Technical Committee of the European
Systemic Risk Board of 20 January 2011;                
http://www.esrb.europa.eu/pub/pdf/ATC-mandate.pdf?6b168b254570c3495fcd360f1e603830.
[42]     One representative of each national central bank of the Member
States and one representative of the ECB, one representative per Member State
of the competent national supervisory authorities (the respective
representatives rotate depending on the item discussed, unless the national
supervisory authorities of a particular Member State have agreed on a common
representative), one representative of each of the ESAs, two representatives of
the European Commission, one representative of the EFC and one representative
of the Advisory Scientific Committee.
[43]     Article 13(1) sentence 1 of the ESRB Rules of Procedure.
[44]     See Mandate of the ATC and chart attached as Annex I to this Report.
[45]     Sub-groups (as
at 12 December 2013): AWG Working
Group on Systemic Risk Identification and Categorization; AWG Analysis of
National Banking System Thematic Section Team; AWG
Risk Dashboard Development Team and AWG Insurance Team.
[46]     Sub-groups (as at 12 December 2013): IWG Countercyclical
Capital Buffers Expert Group; IWG Workstream 1 on Liquidity; IWG Workstream 2
on Real Estate; IWG Workstream 3 on Systemic Buffers and IWG Workstream 4 on
Stricter National Measures.
[47]     For the Advisory Scientific Committee, see Article 4(5) and
Article 12 of the ESRB Regulation, the ESRB Decision on the ASC (ESRB/2011/2) and Articles 11 and 12 of the
ESRB Rules of Procedure.
[48]     See list of members attached as Annex II attached to this
Report.
[49]     Article 12 of the ESRB Regulation.
[50]     "Forbearance, resolution and deposit insurance" (July
2012); "A contribution from the Chair and Vice-Chairs of the Advisory
Scientific Committee to the discussion on the European Commission's banking
union proposals" (October 2012) "The consequences of the Single Supervisory
Mechanism for Europe’s Macro-Prudential Policy Framework" (September 2013);
"Is Europe Overbanked?" (June 2014).
[51]     Joint Expert Groups (as at 12 December 2013): ATC-ASC Joint
Expert Groups: ATC-ASC Expert Group on Interconnectedness; ATC-ASC Expert Group
on Shadow Banking and ATC-ASC Expert Group on Sovereign Exposures.
[52]     For the background see also Recitals 4 to 6 of the ESRB Regulation.
[53]     See also section 2.2.1. 
[54]     Articles 16 & 18 of the ESRB Regulation.
[55]     Recital 19 of the ESRB Regulation.
[56]     Article 19 of the ESRB Regulation.
[57]     Article 3(2g) of the ESRB Regulation.
[58]     See Article 2(3) and 8(1d) of the founding regulation of each
ESA (Regulation (EU) 1093/2010 of the European
Parliament and of the Council of 24 November 2010 establishing a European
Supervisory Authority (European Banking Authority), amending Decision No
716/2009/EC and repealing Commission Decision 2009/78/EC (OJ L 331, 15.12.2010, p. 12);
Regulation (EU) 1094/2010 of the European Parliament and of the Council of 24
November 2010 establishing a European Supervisory Authority (European Insurance
and Occupational Pensions Authority), amending Decision No 716/2009/EC and
repealing Commission Decision 2009/79/EC (OJ L 331, 15.12.2010, p. 48) and Regulation (EU) 1095/2010 of
the European Parliament and of the Council of 24 November 2010 of 24 November
2010 establishing a European Supervisory Authority (European Securities and
Markets Authority), amending Decision No 716/2009/EC and repealing Commission
Decision 2009/77/EC (OJ L331, 15.12.2010, p. 84) (together
"the ESAs Regulations").
[59]     Article 6(1) of the ESRB Regulation.
[60]     Article 11(1) of the ESRB Regulation.
[61]     Article 5(3) of the ESRB Regulation; Article 55(3) of the ESAs
Regulations.
[62]     Article 40(1) of the ESAs Regulations.
[63]     Article 55(2) of the ESAs Regulations.
[64]     Articles 8(1d), 32 & 36 of the ESAs Regulations; Article
3(2g) of the ESRB Regulations.
[65]     Article 23(1) & 32(2) of the ESAs Regulations.
[66]     Articles 8(1d) & 36 of the ESAs Regulations.
[67]     Article 3(2e) of the ESRB Regulation.
[68]     Article 18 of the ESAs Regulations.
[69]     Joint Committee Report on Risks and Vulnerabilities in the EU
Financial System, March 2013 and August 2013.
[70]     See fn. 4.
[71]     Article 15(7) of the ESRB Regulation.
[72]     http://www.esrb.europa.eu/pub/pdf/111125_agreement_EBA_EIOPA_ESMA_ESRB.pdf.
[73]     Source: ESRB Secretariat (Date: 12 December 2013).
[74]     Source: https://www.esrb.europa.eu/pub/pdf/other/list_of_ASC_members.pdf?0500b90fe6f3d5c98278e7f7fe97b2a6
(Date: 10 February 2014).