Macroprudential supervision in Germany is given a legal basis – Bundesbank takes on key functions
Germany’s lower house of parliament, the Bundestag, has now passed the Act to strengthen German financial supervision (Gesetz zur Stärkung der deutschen Finanzaufsicht), or “Financial Stability Act”. The Deutsche Bundes-bank welcomes the fact that this Act will introduce macroprudential supervision at national level, enabling Germany to live up to the global responsibilities that come with having an important financial system. In the words of Bundesbank Executive Board member Dr Andreas Dombret, “By introducing macropruden-tial supervision at national level, Germany is showing that it has learned a key lesson from the financial crisis. We welcome the fact that there will now be a clear and separate legal mandate for macroprudential oversight.” The Act re-spects the Bundesbank’s independence.
The Financial Stability Act envisages the establishment of a German Financial Stability Board. The Bundesbank, the Federal Ministry of Finance and the Fed-eral Financial Supervisory Authority (BaFin) will each have three representa-tives on this board. It will discuss issues that are key to financial stability, and will be able to issue warnings and recommendations if financial stability comes under threat. The Financial Stability Act assigns the Bundesbank important functions in helping to safeguard the stability of the financial system, including responsibility for analysing issues that are key to financial stability, proposing warnings and recommendations to the Financial Stability Board and assessing their implementation.