european systemic risk board

Claire Jones

The European Systemic Risk Board, the European Union’s macroprudential authority, has this evening called for the region’s supervisors to cooperate on efforts to strengthen bank capital.

The move comes less than a month after Christine Lagarde, the IMF’s managing director, was panned by many for calling for a recapitalisation of European banks.

This from the statement: Read more

European economic policies will come under more scrutiny from this month when the European Central Bank takes the lead in a new financial police authority with whistle-blowing powers to prevent future crises.

The European systemic risk board (ESRB), chaired by Jean-Claude Trichet, ECB president, will have powers to issue warnings and recommendations when it sees threats to economies or financial systems. But it could have a tough time proving that such limited powers, wielded by European officials, can prevent financial market turmoil on the scale seen in the past three years. Read more

Imagine that in January, you will become your country’s chief firefighter, but that the very best reports of smoke currently available are unreliable and intermittent. Scared?

Well, the European Systemic Risk Board is due to launch in January, and the ECB’s vice president has just pointed out that, on current data availability, the Board would struggle to do its job. That job, as a quick reminder, is to “assess and prevent potential risks to financial stability in the EU.” No small task, with markets febrile and bank bail-outs still in vogue.

The ECB has a fair bit of data already, but it is geared towards monetary policy rather than macro-prudential regulation. So, what’s missing? Read more