The Financial Stability Board (FSB) is a macro-prudential authority that comprises representatives from supervisory authorities, such as the Bank of Slovenia, the Insurance Supervision Agency and the Securities Market Agency, as well as the Ministry of Finance.
The FSB was established with the entry into force of the Macro-prudential Supervision of the Financial System Act (hereinafter: the ZMbNFS; Official Gazette of the Republic of Slovenia, No. 100/13). On the basis of the aforementioned act, the board is responsible for formulating and implementing macro-prudential policy in the Republic of Slovenia with the objective of helping protect the stability of the entire financial system by the strengthening its resilience and reducing accumulated systemic risks, thereby ensuring that the financial sector is able to make a sustainable contribution to economic growth.
To achieve that objective, the FSB is responsible for performing the following tasks:
- formulating macro-prudential policy;
- identifying, monitoring and assessing risks to financial stability;
- coordinating cooperation and the exchange of information between local supervisory authorities and the supervisory authorities of EU Member States;
- issuing guidelines to the supervisory authorities regarding the prevention and reduction of systemic risk;
- proposing the use of supervisory measures and instruments to the supervisory authorities;
- coordinating the use of supervisory measures and instruments with the measures of authorities responsible for the financial stability of EU Member States and with the measures of other international financial organisations; and
- implementing warnings and recommendations issued by the ESRB, and the drafting of bases for potential inaction or deviations from those warnings and recommendations.
The FSB contributes to the strengthening of cooperation between individual supervisory authorities, each of which supervises its own segment of the financial system, with the aim of working together to quickly and successfully identify risks that could spread from individual segments to the entire financial system.
The FSB formulates macro-prudential policy by issuing guidelines to the supervisory authorities in cases when the need to prevent or reduce systemic risk to financial stability has been identified, or when it is assessed that the warnings and recommendations of the ESRB or other international financial organisations must be implemented. The guidelines are intended for the supervisory authorities responsible for the area with the identified disruption. The guidelines include a definition of identified systemic risk and propose specific macro-prudential supervisory measures, if appropriate.
In implementing macro-prudential policy the supervisory authorities are responsible for the macro-prudential supervision of financial corporations, which are supervised pursuant to the sectoral laws governing their respective areas. The supervisory authorities implement the FSB’s guidelines in the scope of their responsibilities and the relevant measures.
The ZMbNFS assigns the lead role within the FSB to the Bank of Slovenia by appointing the Governor of the Bank of Slovenia as the president of the FSB with the power to convene and chair sessions, while the Bank of Slovenia is given the power to ensure the functioning of the FSB’s secretariat.
The FSB reports to the National Assembly of the Republic of Slovenia once a year with regard to its work, and to EU authorities and the ESRB as necessary.
Macro-prudential instruments and measures of a macro-prudential nature in use in the Republic of Slovenia
Bank of Slovenia (macro-prudential instruments)
Insurance Supervision Agency (measures of a macro-prudential nature)
- Regulation amending the Regulation on the detailed rules and minimum standards for the calculation of insurance-technical provisions
- Calculation of capital adequacy on the basis of Directive 2009/138/EC of the European Parliament and of the Council of 25 November 2009 on the taking-up and pursuit of the business of Insurance and Reinsurance (Solvency II), and the performance of EU-wide stress tests for the insurance industry
Securities Market Agency (measures of a macro-prudential nature)
- Measures linked to regulated securities trading in Slovenia
- Measures linked to the prevention of liquidity risk on the capital market
- Measures linked to improving the guarantee scheme for the claims of investors in securities