Macroprudential policy framework
Macroprudential policy framework
The reforms in institutional and organisational arrangements introduced by the Financial
Stability Act (FSA) broadly address the FSAP recommendations on the macroprudential
policy framework. In particular, the law delineates statutory responsibilities for financial
stability in Germany; establishes the Financial Stability Committee (FSC), and mandates the
Bundesbank to provide it with substantial analytical support, including the identification of
systemic risks and the formulation of recommendations to mitigate them; specifies
arrangements for cooperation and information exchange between the Bundesbank and the
Federal Financial Supervisory Authority (BaFin); and provides for backstop powers to collect
additional information from financial institutions.
The FSC brings together key officials with a wide range of expertise, perspectives and
responsibilities. The organisational design attempts to strike a balance between the
responsibilities of the institutions represented in the FSC – the Federal Ministry of Finance
(BMF), Bundesbank, BaFin and, as a non-voting member, the federal agency for financial
market stabilisation (FMSA) – and their respective individual mandates.
The FSC is already functional but, with just about a year of existence, it is too early to
evaluate effectiveness in attaining its mandated objectives. The authorities emphasise that the
FSC has already played an instrumental role in strengthening cooperation between its
members as well as deepening and formalising the information sharing arrangements between
the Bundesbank, BaFin, and the FMSA. In that context, the main benefit of the FSC has been
to act as an overlay to the existing institutional structure by enhancing coordination and
information exchange among senior policymakers across different authorities.
EU Forecast
euf:ba.18.j:11/nws-01