The Financial Stability Committee was set up at the German Federal Ministry of Finance in January 2013 on the basis of section 2 of the Financial Stability Act (Finanzstabilitätsgesetz). In this way, Germany applied some of the lessons learned from the financial crisis and implemented the ESRB’s December 2011 recommendations on the macroprudential mandate of national authorities. The aim is to enhance macroprudential oversight (i.e. supervision that focuses on the stability of the financial system) and link it more closely to microprudential (i.e. institution-specific) supervision.
The Committee meets on a quarterly basis. Its main tasks are to examine the issues that are relevant to financial stability in Germany, identify potential risks, issue warnings, and present recommendations on how to avert the risks. This work is based on analysis carried out by the Deutsche Bundesbank.
The Federal Ministry of Finance serves as the chair of the Financial Stability Committee. The other members are representatives of the institutions responsible for supervision of the financial system in Germany: the Deutsche Bundesbank, the Federal Financial Supervisory Authority (BaFin), and (in an advisory role) the Federal Agency for Financial Market Stabilisation (FMSA).
Link to macroprudential supervision at EU level
The Financial Stability Committee also liaises with other macroprudential supervisors in the EU. It acts as the contact point for the European Systemic Risk Board (ESRB) and the macroprudential authorities of other EU member states, passes on its warnings and recommendations to the ESRB, and advises on ESRB warnings and recommendations that relate to Germany.