The European Systemic Risk Board (ESRB), which is to act as an early warning system to counter financial market risks, held its inaugural meeting today. Austria is represented in this new body by OeNB Governor Ewald Nowotny and Executive Director of the Financial Market Authority (FMA) Helmut Ettl.
The ESRB’s main task is to provide fundamental analysis of systemic risks facing the EU’s financial system and to issue warnings whenever significant risks are identified. It will also provide political recommendations on how these risks can be countered in order to prevent a renewed increase in excessive risks in the financial system as a whole. “The creation of the ESRB means that, alongside the ECB which is responsible for price stability, Europe has a further heavyweight institution the sole objective of which is to work for the stability of the financial markets,” commented OeNB Governor Nowotny after today’s meeting. FMA Executive Director Helmut Ettl expects the new body to focus on cross-border developments that could present a problem to the financial market. A good example of this, in Ettl’s view, is foreign currency loans, which have long been scrutinised by the Austrian supervisory authority but have also become greatly significant in Central and Eastern Europe. “Warning and recommendations could be addressed to the EU, to one or more Member States or to European or national supervisory authorities. Recommendations aimed at changes in the European legal framework can be addressed to the European Commission,” explained Ettl.
Initial discussions at today’s meeting already touched on risk areas and possible ways of tackling these. The main issues on the agenda, however, were agreeing the structure of the ESRB’s procedures and electing the members of the Steering Committee, which will be responsible for managing the ESBR and supporting its Chair, ECB President Jean-Claude Trichet.
Klaus Grubelnik (FMA Media Spokesperson)
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