discussion of the Bundesbank’s surveillance

Systemic risk analysis in the surveillance note comprises a mix of
quantitative (involving a variety of indicators and models) and qualitative factors (typically
involving expert judgment). The note includes a list of risks that are ordered in three
categories given their probability of occurrence and systemic relevance. This list is
supplemented by an “open” list of potentially systemically important topics to monitor
(“watch list”) that have either not been analysed in depth or are initially considered as not
important enough for inclusion in the other three categories. The note also includes a
comprehensive set of standardised financial market indicators (‘dashboard’). The ensuing
discussion by FSC members may lead to a call for more in-depth information and analyses
(e.g. In the form of a subsequent background paper) on any identified risk.
Both the surveillance note and the background papers contain suggestions for further action.

These suggestions are classified into three categories depending on priority; these are “further
proceedings” (for information only), “issues for discussion” (FSC members to exchange
views without necessarily taking explicit action), and “option for decision” (FSC members to
take an explicit decision). The latter category includes, but is not limited to, suggestions to
issue warnings or recommendations on systemic risk or to enhance data requirements.