The European macroprudential policy framework has been set up to ensure that imbalances are addressed and spillovers are taken into account. One important step in Europe was the launch of the banking union in 2014. This harmonises banking supervision and regulation. But macroprudential policies also need to take potentially adverse impacts on other countries into account.
Strong international institutions like the European Systemic Risk Board (ESRB), which was established in 2010, are thus vital for monitoring and coordinating policies at the supranational level. Therefore, the European level even has the power to top up certain domestic policy decisions.