FSB published a report that reviews the progress on data collection for macro-prudential analysis and the availability and use of macro-prudential tools in Germany. The report also addresses how the authorities assess and manage financial stability risks from non-bank financial intermediation (NBFI). The review focuses on the steps taken by the authorities to implement reforms in this area, including by following up on the relevant Financial Sector Assessment Program (FSAP) and FSB recommendations. The review finds that the macro-prudential framework in Germany is well-established and is implemented through the Financial Stability Committee (FSC). Nevertheless, it makes recommendations for German authorities to further strengthen the macro-prudential framework.
The review finds that data collection, quality, and integration have improved. In addition, effective cooperation between the member authorities of FSC—Bundesbank, BaFin, and the Federal Ministry of Finance—has enhanced the analytical capabilities to assess financial stability risks. FSC has further developed the macro-prudential toolkit in recent years, with the establishment of two borrower-based tools designed to address potential financial stability risks stemming from the residential real estate market. These tools apply to both banks and non-bank financial institutions, but so far have not been activated. The efforts of the authorities to monitor and manage risks to financial stability from NBFI have increased as the importance of the sector has grown, most notably with respect to investment funds, while the set of liquidity management and pricing tools available to asset managers was recently extended. Notwithstanding this progress, the review concludes that further steps can be taken to strengthen the macro-prudential framework by:
- Enhancing data collection for macro-prudential analysis, in particular on residential real estate loans, NBFI, and interconnectedness
- Strengthening the FSC’s public communication and its analysis of non-bank and emerging risks
- Extending the policy toolkit to include income-based instruments for residential real estate financing and providing guidance on the use of liquidity risk management and pricing tools for investment funds, particularly in stressed market conditions
Keywords: Europe, Germany, Banking, Peer Review, Macro-Prudential Framework, Macro-Prudential Tools, Residential Real Estate, Credit Risk, Liquidity Risk, Basel, NBFI, FSC, FSB
Leading economist; commercial real estate; performance forecasting, econometric infrastructure; data modeling; credit risk modeling; portfolio assessment; custom commercial real estate analysis; thought leader.
The three European Supervisory Authorities (ESAs) issued a letter to inform about delay in the Sustainable Finance Disclosure Regulation (SFDR) mandate, along with a Call for Evidence on greenwashing practices.
The Financial Stability Board (FSB) and the Network for Greening the Financial System (NGFS) published a joint report that outlines the initial findings from climate scenario analyses undertaken by financial authorities to assess climate-related financial risks.
The Financial Stability Board (FSB) published a letter intended for the G20 leaders, highlighting the work that it will undertake under the Indian G20 Presidency in 2023 to strengthen resilience of the financial system.
The International Sustainability Standards Board (ISSB) of the IFRS Foundations made several announcements at COP27 and with respect to its work on the sustainability standards.
The International Organization for Securities Commissions (IOSCO), at COP27, outlined the regulatory priorities for sustainability disclosures, mitigation of greenwashing, and promotion of integrity in carbon markets.
The European Banking Authority (EBA) issued a statement in the context of COP27, clarified the operationalization of intermediate EU parent undertakings (IPUs) of third-country groups
The European Union has finalized and published, in the Official Journal of the European Union, a set of 13 Delegated and Implementing Regulations applicable to the European crowdfunding service providers.
The Office of the Superintendent of Financial Institutions (OSFI) published an annual report on its activities, a report on forward-looking work.
The Australian Prudential Regulation Authority (APRA) finalized amendments to the capital framework, announced a review of the prudential framework for groups.
The Bank for International Settlements (BIS) Innovation Hubs and several central banks are working together on various central bank digital currency (CBDC) pilots.