Macro-prudential analysis treats aggregate risk as endogenous and, unlike micro-prudential analysis, is therefore not focused on the analysis and surveillance of individual financial institutions. For this reason, it evaluates systemic risk and considers correlations and common exposures across institutions rather than within institutions. Contributing to financial stability using such an approach is a natural extension of a central bank’s mandate under the EU Treaty.
As you know, up to 10 countries are likely to join the European Union in 2004. Two years later, at the earliest, these countries could be eligible to join the monetary union and to participate in the decision making processes within the ECB. Some commentators have argued that enlargement could prove damaging for the expanded monetary union. Two main arguments seem to be given.