Financial market stability and macroprudential policy

German Financial Stability Committee

One of the key lessons of the recent financial crisis was that, in addition to maintaining the stability of individual institutions, it is important to uphold the functioning and capacity of the financial system as a whole. To this end, it was necessary to further strengthen macroprudential supervision, which focuses on the stability of the entire financial system, and to link it more closely to microprudential supervision, which looks at individual institutions.

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  • International bodies

    At the European and international level, the European Systemic Risk Board (ESRB) and the Financial Stability Board (FSB) were created specifically to be able to identify and address systemic risks to the European and global financial system at an early stage.

  • Macroprudential instruments

    The purpose of macroprudential instruments such as capital buffers for systemically important institutions and the countercyclical capital buffer is to enhance the resilience of the financial system as a whole. Germany already laid the necessary legal foundations for this with the implementation of Basel III in the EU. In its capacity as national designated authority, the Federal Financial Supervisory Authority (BaFin) is the responsible for applying these macroprudential instruments.

  • Reports on financial stability

    The Financial Stability Committee reports to the German Bundestag about the financial stability situation and current trends on an annual basis, usually in June. Each year in November, the Deutsche Bundesbank presents its financial stability report, which analyses the resilience of the financial system and the risks to financial stability in Germany.