Tag Archives: Risks

European Systemic Risk Board

European Systemic Risk Board

Outline of the Community (European Union) legislation about European Systemic Risk Board

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Internal market > Financial services: general framework

European Systemic Risk Board

Document or Iniciative

Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board.

Summary

This Regulation establishes the European Systemic Risk Board * (ESRB). It forms part of the package of measures put in place to reform the European System of Financial Supervision (ESFS) which creates three authorities to supervise financial activities:

  • the European Banking Authority;
  • the European Insurance and Occupational Pensions Authority;
  • the European Securities and Markets Authority.

The package also reforms existing legislation on financial matters with the Omnibus Directive and includes the Regulation conferring specific tasks upon the European Central Bank.

Supervision of the financial system * of the European Union (EU) is further reinforced by:

  • the Joint Committee of the European Supervisory Authorities;
  • the competent or supervisory authorities of Member States.

Objectives of the ESRB

The ESRB is responsible for the macro-prudential oversight of the financial system in the EU. One of its main objectives is to prevent and mitigate systemic risks which might prejudice the financial stability of the EU. In this regard, the ESRB must in particular:

  • determine and collect the information necessary for its action;
  • identify systemic risks and prioritise them;
  • issue warnings and make them public if necessary;
  • recommend measures to be taken once the risks have been identified.

Organisation of the ESRB

The ESRB is composed of:

  • a General Board to ensure the performance of tasks;
  • a Steering Committee which contributes to the decision-making process;
  • a Secretariat responsible for day-to-day business;
  • an Advisory Scientific Committee and an Advisory Technical Committee to provide advice and assistance.

The President of the European Central Bank (ECB) shall chair the ESRB for a term of five years. The Chair will perform his duties assisted by two Vice-Chairs, the first of which shall be elected by and from the General Council of the ECB, while the second shall be the Chair of the Joint Committee.

Members of the ESRB shall have an obligation to comply with the principles of impartiality and professional secrecy when performing their duties, including after their duties have ceased.

Meetings of the General Board shall take place four times a year, preceded by meetings of the Steering Committee. The Chair of the ESRB may convene extraordinary meetings.

The ESRB may also seek the advice of the private sector when necessary.

Warnings and recommendations

The ESRB may issue warnings and make recommendations concerning remedial action to be adopted, or even legislative initiatives. Such recommendations may be addressed:

  • to the EU;
  • to one or several Member States;
  • to one or several European supervisory authorities;
  • to one or several national supervisory authorities.

Recommendations relating to measures to be adopted shall be issued according to a colour code which varies according to the level of risk. If the ESRB observes that its recommendations have not been followed, it shall, confidentially, inform the addressees, the Council and, where relevant, the European Supervisory Authority concerned.

Key terms of the Act
  • Systemic risk: a risk of disruption in the financial system with the potential to have serious negative consequences for the internal market and the real economy.
  • Financial system: all financial institutions, markets, products and market infrastructures.

Reference

Act Entry into force Deadline for transposition in the Member States Official Journal

Regulation (EU) No 1092/2010

16.12.2010

OJ L 331, 15.12.2010

Related Acts

Council Regulation (EU) No 1096/2010 of 17 November 2010 conferring specific tasks upon the European Central Bank concerning the functioning of the European Systemic Risk Board [Official Journal L 331 of 15.12.2010].

Directive 2010/78/EU of the European Parliament and of the Council of 24 November 2010 amending Directives 98/26/EC, 2002/87/EC, 2003/6/EC, 2003/41/EC, 2003/71/EC, 2004/39/EC, 2004/109/EC, 2005/60/EC, 2006/48/EC, 2006/49/EC and 2009/65/EC in respect of the powers of the European Supervisory Authority (European Banking Authority), the European Supervisory Authority (European Insurance and Occupational Pensions Authority) and the European Supervisory Authority (European Securities and Markets Authority) Text with EEA relevance [OJ L 331 of 15.12.2010].

Towards a Community programme for flood risk management

Towards a Community programme for flood risk management

Outline of the Community (European Union) legislation about Towards a Community programme for flood risk management

Topics

These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.

Environment > Civil protection

Towards a Community programme for flood risk management

Document or Iniciative

Commission Communication of 12 July 2004 “Flood risk management – flood prevention, protection and mitigation” [COM(2004) 472 final – Official Journal C 49, 28 February 2006].

Summary

The situation with regard to flooding

Between 1998 and 2002, Europe suffered over 100 major floods, including the catastrophic floods along the Danube and Elbe rivers in 2002. These floods had a disastrous impact on the people affected, in terms of their health (some 700 fatalities since 1998), their social situation (displacement of about half a million people) and their economic situation (at least EUR 25 billion in insured economic losses). These floods also had severe environmental consequences (risks of contamination when waste water treatment plants are affected or chemicals are involved, destruction of biodiversity, etc.).

The Commission indicates that river and coastal floods vary considerably in size and duration and that the root causes of floods (rainfall, storms or major variations in sea level) are natural phenomena and essentially uncontrollable. However, it also points out that the damage resulting from floods is very much influenced by human actions (clearing of forests, straightening of rivers, and extensive building in high-risk areas, etc.).

Lastly, the Commission considers that the frequency of flooding will increase (as a result of climate change and the growing increase in the number of people and economic assets in flood risk zones), calling for concerted action at EU level.

Action undertaken and in progress

The EU already has a number of instruments for flood prevention and management:

  • in the research area, with the 5th and 6th research framework programmes;
  • in the regional policy area, in particular with the Structural Funds, e.g. the INTERREG initiative and the Cohesion Fund;
  • with the EU solidarity fund, which grants rapid financial assistance;
  • in the field of the common agricultural policy, the reform of which focuses, in particular, on rural development;
  • in the environmental field, the Water Framework Directive will help to mitigate the effects of floods, even if this is not one of its main objectives, and the establishment of the monitoring and information centre (MIC) will serve to improve the preparedness of the national protection authorities.

For their part, several Member States have drawn up flood protection plans and strategies and flood risk maps. Their level of involvement and the type of initiatives they take depend however on the type of flood risk (river, coastal, etc.) to which the country is exposed and the degree of risk.

In addition, international cooperation is being established for river basins such as the Rhine, Oder, Meuse, Danube, Saar, Moselle and Elbe: the countries bordering these rivers have established bodies to ensure a coordinated approach to flood risk management and cross-border protection plans.

Towards a European action programme

The Commission proposes that the Member States should cooperate with it to draw up and implement a coordinated action programme for flood prevention, protection and mitigation.

This action plan would include in particular:

  • improving cooperation and coordination between Member States through the development and implementation of flood risk management plans for each adversely affected river basin and coastal zone;
  • development and implementation of flood risk maps by the Member States;
  • improving information exchange, sharing of experiences, and the coordinated development and promotion of best practices; these measures would in particular fall within the area of responsibility of the Commission;
  • developing stronger linkages between the research community and the authorities responsible for flood management;
  • improving coordination between the relevant Community policies;
  • increasing awareness of flood risks through wider stakeholder participation and more effective communication.

Lastly, in an annex, the communication sets out guidelines concerning the essential features of the flood risk management plans and flood risk maps to be drawn up by the Member States.

Related Acts

Directive 2007/60/EC of the European Parliament and of the Council of 23 October 2007 on the assessment and[Official Journal L 288, 6.11.2007].
The objective of this Directive is to reduce and manage flood-related risks to human health, the environment and property, in particular along rivers and in coastal areas. It provides in particular for the evaluation of flood risk in river basins by 2011 and for flood mapping in all areas with a significant flood risk by 2013. It also provides for coordination within shared river basins, and for producing flood risk management plans through a broad participatory and cooperation process between Member States by 2015.

Communication from the Commission of 28 August 2002 – The European Community response to the flooding in Austria, Germany and several applicant countries – A solidarity-based initiative [COM(2002) 481 final – Not published in the Official Journal].