Bank of Lithuania representatives – at the European Systemic Risk Board inaugural meeting in Frankfurt am Main
Today an inaugural meeting of the European Systemic Risk Board (ESRB) – a new European Union financial system supervisory body – has been held in Frankfurt am Main (Germany). Mr Reinoldijus Šarkinas, Chairman of the Board of the Bank of Lithuania, and Mr Kazimieras Ramonas, Director of the Credit Institutions Supervision Department participate in the meeting together with representatives of banking, insurance and securities supervision of other EU countries.
ESRB is an independent body responsible for the macro-prudential oversight of the financial system. Its performance is financed by the funds of the European Central Bank (ECB). ESRB will collect and analyse all required information, submit warnings related to risk and will propose recommendations how to mitigate risk, will monitor the implementation of given recommendations. Although decisions taken by ESRB will not be legally binding, in cases of non-compliance member states will have to indicate reasons. ESRB will address warnings or recommendations to individual countries, their groups or the whole Community.
ESRB is composed of the General Board, Steering Committee, Secretariat, Advisory Technical Committee and Advisory Scientific Committee.
According to Mr Reinoldijus Šarkinas, at the ESRB inaugural meeting the ESRB rules of procedure were established – members of the Steering Committee were elected, the mandates for the Advisory Technical Committee and the Advisory Scientific Committee were adopted .
The main decision making body of ESRB is the General Board whose members are all governors of national central banks of the European System of Central Banks, the President of the ECB and the Vice-President of the ECB, a Member of the Commission, the Chairs of the Advisory Technical Committee and Advisory Scientific Committee, the Chairpersons of the European Supervisory Authorities and representatives of the national supervisory authorities. Lithuania is represented in this Board by the Chairman of the Board of the Bank of Lithuania who has a voting right and the Director of the Credit Institutions Supervision Department of the Bank of Lithuania, high-level representatives of the Securities Commission and Insurance Supervisory Commission without voting rights.
Two representatives of the Bank of Lithuania will work in the ESRB Advisory Technical Committee which will give consultations and assistance in important issues related to the work of the ESRB, prepare reports on issues related with the financial stability in the EU.
In November 2008 because of the financial crisis, the European Commission mandated the experts group headed by the former Governor of the Banque de France Jacques de Larosiere to give recommendations on how to strengthen the supervision of the European financial system and restore confidence in the financial system. Implementing these recommendations and with the approval of the European Council, the ESRB and three European Supervisory Authorities (banking, insurance and occupational pensions, securities) were established and legal acts of the European Parliament and the Council required for their work were adopted.
The ESRB General Board meetings are planned to be held every three months in Frankfurt am Main.