the ecb “ with a view to contributing to the safety and soundness of credit institutions and the stability of the financial system within the eu and each member state ”. the emphasis on the systemic perspective is further strengthened by a reference to “ the unity and integrity of the internal market ”. the micro - prudential tasks of the ecb will also have a systemic dimension. namely, the ecb will take decisions regarding all “ significant ” banking groups ( around 150 banks in the euro area countries ). since these institutions have systemic relevance, prudential measures applied will also have consequences on the stability of the financial system as a whole. regarding the macro - prudential tasks conferred on the ecb, the power to initiate and implement macro - prudential measures will primarily remain with the national authorities, subject to a notification mechanism vis - a - vis the ecb. the ecb may object to these measures and the national authorities should duly consider the ecb ’ s reasons prior to proceeding with any decision. moreover, any national competent or designated authority may propose to the ecb to act in order to address the specific situation of the financial system and the economy in its member state. an important feature of the ssm regulation is that the ecb may, if deemed necessary, also apply macro - prudential measures. these measures include higher requirements for capital buffers as well as more stringent measures to address systemic or macro - prudential risks at the level of credit institutions. the application of these measures is however subject to the conditions and procedures specifically set out in the capital requirements directive ( crd iv ) and the capital requirements regulation ( crr ). the toolbox that is envisaged to be at the disposal of macro - prudential authorities, including the ecb, is rather broad. the set of available instruments defined by the crd iv includes ( i ) counter - cyclical capital buffers, ( ii ) a systemic risk buffer, ( iii ) a capital surcharge for systemically important financial institutions as well as ( iv ) pillar 2 measures applied to groups of institutions. the prudential measures that are falling under the remit of the crr and that can be used for macro - prudential purposes include ( i ) capital requirements, ( ii ) sectoral risk weights, ( iii ) large exposure limits, ( iv ) leverage ratio and liquidity requirements, once implemented, and ( v ) public disclosure requirements. additional features

##udential policy framework in europe in europe, the institutional response to these policy challenges was the establishment of the european systemic risk board ( esrb ), which has a clearly defined mandate and responsibility in macro - prudential policy - making and coordination at eu level. having issued its recommendation on the mandate of national macro - prudential authorities, the esrb also plays a key role in facilitating the establishment of a macro - prudential policy framework at the level of individual member states. however, the esrb does not have direct control over the instruments that are to be used to address systemic risks. while the esrb can issue recommendations on the application of policy tools, the macro - prudential instruments are ultimately in the hands of national bis central bankers ’ speeches authorities. therefore, close cooperation between member states is unavoidable both as regards the assessment of systemic risk and the implementation of macro - prudential policy. this framework will in the future be complemented by the macro - prudential tasks and responsibilities conferred upon the ecb as envisaged in the upcoming regulation on the single supervisory mechanism ( ssm ). relationship with monetary policy given the key role that central banks play in financial stability analysis and macro - prudential policy - making, the question on the relationship with monetary policy naturally arises. the ecb has a clear mandate to preserve price stability over the medium term. however, it may be desirable to incorporate in the decision - making process of monetary policy certain financial variables, which, over the medium to longer term, may influence inflationary developments ( e. g. excessive credit growth, asset bubbles etc. ). at the same time, it has to be acknowledged that monetary policy may have its limits in periods when the banking system and the non - bank private sector are busy repairing their balance sheets, i. e. correcting the excessive leverage that they built up in good times. properly designed and calibrated macro - prudential policies may help to avoid these situations and may thus support the repair of the monetary transmission mechanism. furthermore, there is growing evidence that monetary policy itself may contribute to the fluctuation of risk aversion and risk taking in the banking system over time. concretely, banks can react to the actual stance of monetary policy by changing the composition and the risk profile of their portfolio ( “ risk - taking channel ” of monetary policy ). this is another example of how macro - prudential policies can contribute to the