BaFin contributes to the work of the FSC

Internally, BaFin has also stepped up its sector-
wide surveillance. In January 2013, BaFin established a cross-sectoral Risk Committee that
meets quarterly and reports to its Board. The Risk Committee includes representatives from
all directorates, as well as observers from the Bundesbank’s Banking Supervision and
Financial Stability Departments. The objective of the Risk Committee is to combine the
macro and micro perspectives, to assess relevant risks, and to take them into account in
supervisory activities. Through the Bundesbank’s attendance, the Risk Committee also
informally feeds in the Bundesbank’s macroprudential surveillance to the FSC.

The FSC’s mandate is solely macroprudential in nature; unlike similar bodies in some other
countries, it does not have a secondary objective to promote economic development. The
FSC monitors and analyses the macroprudential effects of measures in other policy areas as
part of its ongoing financial stability surveillance, while assessing the effects of its actions on
other policies is expected to form an integral element of the process of issuing
recommendations. According to the authorities, the FSC’s composition helps to address
conflicts that could arise between macroprudential and broader economic policy objectives.