Much of the work just mentioned was naturally initiated through the ESRB’s regular discussions on risks and vulnerabilities in the financial system. Here, the ESRB benefits immensely from its broad composition of members, as these tasks must be underpinned by a truly holistic assessment of national, sectoral and overarching aspects, including how all the individual components interact. The ECB’s support on the analytical and the statistical side is, of course, particularly important here, but also the inputs from national authorities and other bodies are essential. We have come a long way in terms of issues such as access to and comparability of data, for instance as regards national banking systems, which is a benefit not only within the ESRB membership. And products like the ESRB Risk Dashboard makes a broad set of risk indicators easily accessible for the Members as well as the general public. Furthermore, the risk discussions often generate further assessments that are eventually communicated in one form or the other, such as the reports and recommendations I just mentioned. A main strength in the ESRB’s risk assessments is, in my view, that they capture both a top-down perspective on risks as well as national assessments where the members make self-assessments of the risks at hand and what issues they expect to tackle down the road. These assessments are discussed together with all the other inputs to the risk discussions. Moving forward, one area where I hope the ESRB will make further progress is in developing the processes for making country assessments.
As some of you here have experienced in person, the General Board usually has over 70 members seated around the table, most of them central bank governors or heads of national supervisory authorities. Such a crowd around a meeting table could have been a practical nightmare and an impediment to efficient decision-making. But so far it actually works. We have had candid and open discussions in this composition and we have been fully capable of taking decisions. As I touched upon earlier, we may not always unanimously agree on everything, not even after many iterations between the parties involved and at different levels. Such processes may indeed require a bit of patience, especially when a new process is being established. But in the end the arguments from all sides have been heard and when we need to make decisions in the General Board, ultimately we simply vote. Legally, the ESRB is an independent EU body tasked with macroprudential oversight of the EU financial system and the prevention and mitigation of systemic risk. It is chaired by the President of the ECB. The ESRB has no binding powers but has “soft tools”. To fulfill its mandate, the ESRB identifies, monitors and assesses potential systemic risks and, where appropriate, issues so called warnings, or recommendations to mitigate such risks according to the principle “comply or explain”. This principle simply says that either you do as recommended or you explain why you have chosen not to.