Macroprudential Supervision in the EU

With the increasing importance of financial stability and Banka Slovenije’s incorporation into the Eurosystem, international cooperation has also developed in the area of financial stability. The director of Banka Slovenije’s Financial Stability and Macroprudential Policy Department is a member of the ECB’s Financial Stability Committee, and experts from the department sit on its working groups and on the technical groups established temporarily to study specific areas. Banka Slovenije is also involved in the work of the Advisory Technical Committee and its substructures within the European Systemic Risk Board (ESRB). Direct cooperation also takes the form of bilateral meetings with experts from other national central banks.

European Systemic Risk Board

The European Systemic Risk Board (ESRB) was established in 2010 as the body responsible for the macroprudential supervision of the financial system in the EU.

The objective of the ESRB’s work is to prevent and mitigate systemic risks to financial stability in the EU. The tasks of the ESRB include defining risks on the basis of which it may issue recommendations for remedial action.

Overview of ESRB recommendations

Explanation of grades issued by the ESRB

Positive grades	Mid-grades	Negative grades
Fully compliant – actions taken fully implement the recommendation		Materially non-compliant – actions taken only implement a very small part of the recommendation
Largely compliant – actions taken implement almost all of the recommendation	Partially compliant– actions taken only implement part of the recommendation	Non-compliant – actions taken are not in line with the nature of the recommendation
Inaction sufficiently explained – no actions were taken but the addressee provided sufficient justification		Inaction insufficiently explained – no actions were taken and the addressee did not provide sufficient justification