The “prudential” suffix, for its part, refers to the fact that it has to act pre-emptively; it will seek firstly to mitigate the accumulation of systemic risk or its potential materialisation, and secondly to generate buffers (mainly capital buffers in the case of banks) enabling the impact of systemic risk, should it materialise, to be cushioned. The multi-dimensional nature of systemic risk One characteristic of macroprudential policy is the multi-dimensional nature of its objective: to prevent systemic risk. Theoretical and empirical research appear to concur that there are at least two dimensions to this risk which, moreover, can interact with each other. The first is the time dimension, which is related to how systemic risk evolves over the course of the financial cycle. A good example of this dimension can be found in the run-up to the global financial crisis. During those years, there was strong growth in credit to the nonfinancial private sector in Spain (in particular to real estate development and construction activities), attaining levels far above those considered sustainable. This situation was accompanied by price rises and increases in real estate market activity, also to unsustainable levels. Against this background, household and corporate debt associated with real estate transactions mounted to such an extent over time that, when its sustainability was questioned and financing ground to a halt, there was a sharp correction to these financial imbalances.
AMCESFI is structured as a collegiate body in which the senior officials from the aforementioned institutions participate. It is entrusted with the oversight of the financial system as a whole, acting in an advisory capacity with respect to the proposed macroprudential measures put forward by the sectoral authorities. 5  The need for coordination in this field is also very necessary at the supranational level, and in particular in Europe since the creation of the Banking Union, which centralises at the European Central Bank (ECB) the supervision of the significant banks in the 21 EU countries.3 In this respect, although decisions on macroprudential instruments in Europe are in the hands of national authorities, the ECB scrutinises these national banking authorities’ proposed macroprudential policy measures to ensure that they are consistent across the euro area countries. In particular, the ECB is empowered to tighten the measures applied by national authorities to specific instruments envisaged in Community banking legislation. The European Systemic Risk Board (ESRB), on which the heads of the EU central banks and regulatory and supervisory authorities for banks, securities, insurance and pension funds sit, has been in place since 2011. The ESRB, whose Advisory Technical Committee it is my honour to chair, has macroprudential oversight functions and is empowered to issue opinions, warnings and recommendations on matters relating to the emergence of systemic risks, and the suitability of macroprudential measures proposed at the national level.