ECB published the third issue of its biannual Macroprudential Bulletin. This issue provides insights into the ECB’s macro-prudential tools and its thinking on macro-prudential issues.
This issue begins by describing the ECB floor methodology for setting the other systemically important institution (O-SII) capital buffer that each identified O-SII is required to maintain. It then (Chapter 2) describes quality assurance as part of the 2016 Stress Test Exercise, followed by quantitative analysis of the European Deposit Insurance Scheme (EDIS), the third pillar of the Banking Union. The analysis is focused on exposure of the EDIS to bank failures and the benefits of risk-based contributions. This issue ends with a summary of the macro-prudential policy measures that have been implemented or announced in euro area countries since the publication of the second Macroprudential Bulletin in October 2016.
Additionally, an overview of all measures reported to the ECB under Article 5 of the Single Supervisory Mechanism (SSM) Regulation is provided on the ECB website, along with the overview tables showing all macro-prudential measures at a glance and these tables will be updated on a quarterly basis. Under the SSM Regulation, ECB has been assigned specific powers in the field of macro-prudential policies. In particular, ECB is responsible for assessing macro-prudential measures adopted by national authorities in the countries subject to ECB Banking Supervision. ECB has the power to apply, if deemed necessary, more stringent measures than adopted nationally to address risks to financial stability.
Keywords: Europe, ECB, Banking, Macroprudential Policy, Macroprudential Bulletin, Stress Testing
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