Strengthening the EUs financial system is needed for asustainable recoverAt its meeting today in Frankfurt, the ESRB General Board concluded that, despiteimproved financial market conditions, strengthening the EUs financial system isneeded for a sustainable recovery. Further efforts to boost confidence in banksbalance sheets are central to ensuring the supply of credit to the real economy. TheGeneral Board also noted the challenges faced by many insurers in a prolongedlow-yield environment.
In addition, the Board discussed the ongoing work towards a
more comprehensive framework for macro-prudential policy in the EU.
Financial market conditions have generally improved since the General Boards
previous meeting on 20 December 2012. However, fragilities in the EU financial
system persist, making it vulnerable to adverse macro-financial dynamics. Lowerthan-
expected economic activity could impact banks profits. Uncertainty about
banks balance sheets affects their ability to raise capital and market funding, and to
provide credit to the real economy. This, in turn, could hamper a sustainable
recovery.
The ESRB shares the Eurogroups view on the importance of fully guaranteeing
deposits below EUR 100.000 across the EU. Increased legal certainty for bank
creditors regarding the priority of their claims would reinforce the resilience of the
financial system.
Measures to boost confidence in banks balance sheets must continue
To enhance market confidence in banks resilience, efforts to ensure that banks
assets are valued correctly should continue. In this context, harmonising definitions
like forbearance and non-performing loans is an important step in the right direction.
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Insurers face challenges from a prolonged low-yield environment
A low-yield environment over an extended period creates a number of challenges. It
exposes the vulnerabilities of the business models of life insurance companies
issuing long-term guarantees and may contribute to excessive search for yield. The
medium-term solvency and profitability of insurers exposed to these risks call for
scrutiny. From a macro-prudential perspective, channels of potential contagion, both
to and from life insurers, should be further investigated.
Towards a sound macro-prudential framework across the EU
A sound policy framework is essential for the effective conduct of macro-prudential
oversight both at national and EU level. The ESRB has made important progress
towards a comprehensive framework linking the preservation of financial stability
the ultimate objective of macro-prudential policy to a set of intermediate objectives
(e.g., mitigating excessive credit flow fluctuations), and an indicative set of macroprudential
instruments to achieve these objectives (e.g., counter-cyclical buffers).
***
Today, the ESRB General Board published the third issue of the risk dashboard,
which is a set of quantitative and qualitative indicators of systemic risk in the EU
financial system. The risk dashboard is available at the ECBs Statistical Data
Warehouse.
Reproduction is permitted provided that the source
Bron: politics.be
In addition, the Board discussed the ongoing work towards a
more comprehensive framework for macro-prudential policy in the EU.
Financial market conditions have generally improved since the General Boards
previous meeting on 20 December 2012. However, fragilities in the EU financial
system persist, making it vulnerable to adverse macro-financial dynamics. Lowerthan-
expected economic activity could impact banks profits. Uncertainty about
banks balance sheets affects their ability to raise capital and market funding, and to
provide credit to the real economy. This, in turn, could hamper a sustainable
recovery.
The ESRB shares the Eurogroups view on the importance of fully guaranteeing
deposits below EUR 100.000 across the EU. Increased legal certainty for bank
creditors regarding the priority of their claims would reinforce the resilience of the
financial system.
Measures to boost confidence in banks balance sheets must continue
To enhance market confidence in banks resilience, efforts to ensure that banks
assets are valued correctly should continue. In this context, harmonising definitions
like forbearance and non-performing loans is an important step in the right direction.
2/2
Insurers face challenges from a prolonged low-yield environment
A low-yield environment over an extended period creates a number of challenges. It
exposes the vulnerabilities of the business models of life insurance companies
issuing long-term guarantees and may contribute to excessive search for yield. The
medium-term solvency and profitability of insurers exposed to these risks call for
scrutiny. From a macro-prudential perspective, channels of potential contagion, both
to and from life insurers, should be further investigated.
Towards a sound macro-prudential framework across the EU
A sound policy framework is essential for the effective conduct of macro-prudential
oversight both at national and EU level. The ESRB has made important progress
towards a comprehensive framework linking the preservation of financial stability
the ultimate objective of macro-prudential policy to a set of intermediate objectives
(e.g., mitigating excessive credit flow fluctuations), and an indicative set of macroprudential
instruments to achieve these objectives (e.g., counter-cyclical buffers).
***
Today, the ESRB General Board published the third issue of the risk dashboard,
which is a set of quantitative and qualitative indicators of systemic risk in the EU
financial system. The risk dashboard is available at the ECBs Statistical Data
Warehouse.
Reproduction is permitted provided that the source
Bron: politics.be