May 24, 2018

ECB published the results of its biannual Financial Stability Review (FSR) in May 2018. The FSR assesses developments relevant for stability in the euro area financial system and covers shadow banking activities involving non-bank financial intermediaries, financial markets, and market infrastructures. This issue of FSR also examines developments in the regulatory framework of the financial system.

The review includes three special features aimed at deepening ECB’s financial stability analysis and broadening the basis for macro-prudential policy making. The first special feature presents a new composite financial stability risk index (FSRI) aimed at predicting large adverse shocks to the real economy in the near term. The second feature introduces a composite cyclical systemic risk indicator (CSRI) designed to signal risks of a financial crisis over the medium term. The third feature analyzes the distribution of interest rate risk in the euro area economy, using balance sheet data and information on derivative positions from significant credit institutions.

The FSR identifies four main risks to financial stability in the euro area over the next two years. These risks are related to:

  • Spillovers from a disruptive repricing of risk premia in global financial markets
  • Potential hampering of the ability of banks to intermediate amid weak financial performance compounded by structural challenges
  • Public and private debt sustainability concerns amid historically high debt levels
  • Liquidity risks that could emerge in the non-bank financial sector, with contagion to the broader system

 

Related Links

Keywords: Europe, EU, Banking, Securities, Financial Stability Review, Systemic Risk, Shadow Banking, Interest Rate Risk, ECB

Related Articles
News

US Agencies Adopt Rule to Exclude Community Banks from Volcker Rule

US Agencies (CFTC, FDIC, FED, OCC, and SEC) adopted a final rule to exclude community banks from the Volcker Rule, in line with amendments to certain sections of the Economic Growth, Regulatory Relief, and Consumer Protection (EGRRCP) Act.

July 22, 2019 WebPage Regulatory News
News

US Agencies Adopt Amendments to Simplify Regulatory Capital Rules

US Agencies (FDIC, FED, and OCC) adopted a final rule that reduces regulatory burden by simplifying several requirements in the regulatory capital rules for banks.

July 22, 2019 WebPage Regulatory News
News

IA of Hong Kong Delegates Inspection and Investigation Powers to HKMA

HKMA and IA of Hong Kong jointly issued a statement announcing the delegation of the inspection and investigation powers of IA to HKMA, pursuant to the statutory regulatory regime for insurance intermediaries under the Insurance Ordinance.

July 19, 2019 WebPage Regulatory News
News

FSB Extends Implementation Timeline for Policy Recommendations on SFTs

FSB announced adjustments to the implementation timelines for its recommendations on securities financing transactions (SFTs), specifically those related to the minimum haircut standards for non-centrally cleared SFTs.

July 19, 2019 WebPage Regulatory News
News

EBA Single Rulebook Q&A: Third Update for July 2019

EBA published answers to six questions under the Single Rulebook question and answer (Q&A) tool this week.

July 19, 2019 WebPage Regulatory News
News

EBA Report Assesses Regulatory Framework for Fintech Activities

EBA published the findings of its analysis on the regulatory framework applicable to fintech firms when accessing the market.

July 18, 2019 WebPage Regulatory News
News

OSFI Revises Capital Requirements for Operational Risk for Banks

OSFI is revising its capital requirements for operational risk, in line with the final Basel III revisions published by BCBS in December 2017.

July 18, 2019 WebPage Regulatory News
News

OSFI Consults on Revised Principles for Management of Liquidity Risk

OSFI proposed revisions to Guideline B-6 on the principles for the management of liquidity risk.

July 18, 2019 WebPage Regulatory News
News

ESMA Guidance on Disclosures for Credit Rating Sustainability Issues

ESMA published the technical advice on sustainability considerations in the credit rating market, along with the final guidelines on disclosure requirements applicable to credit ratings.

July 18, 2019 WebPage Regulatory News
News

FASB Issues Q&A on Estimation of Expected Credit Losses by Firms

FASB issued a second question-and-answer (Q&A) document that addresses more than a dozen frequently asked questions related to the Accounting Standards Update No. 2016-13 titled “Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments.”

July 17, 2019 WebPage Regulatory News
RESULTS 1 - 10 OF 3482