ESRB comments on new capital adequacy rules in official letter

The European Systemic Risk Board (the ESRB) has today published a letter on the importance of taking the macroprudential policy perspective into account in the EU's new capital adequacy rules, what is known as CRR/CRD IV. A decision on the new capital adequacy rules is expected to be made in June.

 

The letter is addressed to EU legislators as well as a broader general public. The ESRB wishes to highlight in particular three principles that should characterise the new EU legislation to provide the scope to effectively counteract and mitigate risks to the stability of the financial system.

 

The three principles are:

• the flexibility to introduce stricter demands at both national and EU level than those stated in the EU legislation, to manage specific risks in the financial system,
• the scope for the responsible authorities to act early and efficiently, and
• an efficient coordination at EU level. The ESRB, with its specific competence in the field of macroprudential policy should have this task of macroprudential overseer.

"It is important to have the scope to conduct an efficient macroprudential policy in Europe and at national level to prevent and mitigate systemic risk. We therefore welcome this letter from the ESRB," says Stefan Ingves.