Recommendation of the European Systemic Risk Board of 4 April 2013 on interme... (32013Y0615(01))
Recommendation of the European Systemic Risk Board of 4 April 2013 on intermediate objectives and instruments of macro-prudential policy (ESRB/2013/1)
- RECOMMENDATION OF THE EUROPEAN SYSTEMIC RISK BOARD
- of 4 April 2013
- on intermediate objectives and instruments of macro-prudential policy
- (ESRB/2013/1)
- SECTION 1
- RECOMMENDATIONS
- Recommendation A —
- Definition of intermediate objectives
- Recommendation B —
- Selection of macro-prudential instruments
- Table 1
- Indicative list of macro-prudential instruments
- 1.
- Mitigate and prevent excessive credit growth and leverage
- 2.
- Mitigate and prevent excessive maturity mismatch and market illiquidity
- 3.
- Limit direct and indirect exposure concentration
- 4.
- Limit the systemic impact of misaligned incentives with a view to reducing moral hazard
- 5.
- Strengthen the resilience of financial infrastructures
- Recommendation C —
- Policy strategy
- Recommendation D —
- Periodical evaluation of intermediate objectives and instruments
- Recommendation E —
- Single market and Union legislation
- SECTION 2
- IMPLEMENTATION
- 1.
- Interpretation
- 2.
- Criteria for implementation
- 3.
- Timeline for the follow-up
- 4.
- Monitoring and assessment
- SECTION 3
- FINAL PROVISIONS
- 1.
- ESRB guidance on the application of the macro-prudential instruments
- 2.
- Future reform of the macro-prudential toolkit
- ANNEX TO THE RECOMMENDATION ON INTERMEDIATE OBJECTIVES AND INSTRUMENTS OF MACRO-PRUDENTIAL POLICY
- 1.
- Introduction
- 2.
- Identifying intermediate objectives
- 3.
- Selecting macro-prudential instruments
- Table 2
- Intermediate objectives and indicative macro-prudential instruments
- 1.
- Mitigate and prevent excessive credit growth and leverage
- 2.
- Mitigate and prevent excessive maturity mismatch and market illiquidity
- 3.
- Limit direct and indirect exposure concentration
- 4.
- Limit the systemic impact of misaligned incentives with a view to reducing moral hazard
- 5.
- Strengthen the resilience of financial infrastructures
- Attachment 1
- Macro-prudential instruments analysed by the ESRB
- 1.
- Mitigate and prevent excessive credit growth and leverage
- Countercyclical capital buffer (CCB)
- Sectoral capital requirements (including requirements for intra-financial system exposures)
- Macro-prudential leverage ratio
- Loan-to-value (LTV) and loan-to-income/debt (service)-to-income (LTI) requirements
- Complementarity
- 2.
- Mitigate and prevent excessive maturity mismatch and market illiquidity
- Macro-prudential adjustment to liquidity ratio (e.g. liquidity coverage ratio — LCR) and macro-prudential restrictions on funding sources (e.g. net stable funding ratio — NSFR)
- Macro-prudential unweighted limit to less stable funding (e.g. loan-to-deposit ratio)
- Margin and haircut requirements
- Complementarity
- 3.
- Limit direct and indirect exposure concentrations
- Large exposure restrictions
- CCP clearing requirement
- Complementarity
- 4.
- Limit the systemic impact of misaligned incentives with a view to reducing moral hazard
- SIFI capital surcharges
- Recovery and resolution regimes
- Complementarity
- 5.
- Strengthen the resilience of financial infrastructure
- Deposit guarantee schemes (DGSs)
- Margin and haircut requirements on CCP clearing
- Increased disclosure
- Structural systemic risk buffer
- Complementarity
- Attachment 2
- Intermediate objectives of macro-prudential policy in insurance
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