BIS Review 149/2010  5  markets, while necessary, is not sufficient because it does not take into account the interactions among financial institutions and between financial institutions and the real sector. The European Systemic Risk Board (ESRB), a key component of an integrated micro-macro European System of Financial Supervisors (ESFS), will be operational at the beginning of 2011.
It will be responsible for macro-prudential oversight to prevent or mitigate systemic risks, enhance early warning mechanisms and facilitate the translation of risk assessments into action so as to avoid episodes of widespread financial distress, to enhance the smooth functioning of the internal market, and ensure a sustainable contribution of the financial sector to economic growth.