FSC’s focus is not on regulation
Scope of coverage: The FSC’s focus is not on regulation per se but rather on systemic
risks and how to address them, including through regulation. However, the extent of
its involvement in the development or implementation of regulations with systemic
implications is not fully clear.
This also applies for crisis management and resolution
of a failing systemically important financial institution, particularly since several FSC
members may be involved in those decisions within their institutions. The authorities
indicate that some of these issues are discussed in the FSC (e.g. The calibration of the
macroprudential tools set forth in the EU’s Capital Requirements Directive (CRD)
IV/Capital Requirements Regulation (CRR)), but that the FSC is not necessarily
steering the debate and that each member institution has the mandate and authority to
act if the need arises.
However, there could be instances in the future whereby
disagreements could arise among member institutions as to whether an issue should
be discussed by the FSC or not. It may therefore be preferable – both for transparency
and accountability – if there was greater clarity on the types of issues that are within
the scope of the FSC for discussion and/or for decision-making purposes.
EU Forecast
euf:ba.18.j:13/nws-01