European Systemic Risk Board: fifteen years' existence and fresh financial stability challenges
Bulletin No. 261, article 6. The fifteenth anniversary of the creation of the European Systemic Risk Board (ESRB) provides an opportunity to take stock of how this body has functioned. Created in the wake of the 2008 financial crisis, the ESRB’s mission is to prevent and mitigate systemic risk, i.e. the risk that disruptions impact the entire European financial system. It has therefore deployed a common framework for analysing these risks and helped to mitigate them by alerting national authorities to new threats (real estate risk in 2019, non-bank finance, for example). The ESRB now needs to adjust its approach by focusing on work with global implications while making greater use of the contributions of its members to optimise its operational efficiency. It must also take more account of all the risks likely to affect financial stability, including long-term trends (e.g. demographic and technological trends).
Up until the 2008 financial crisis, financial regulators focused primarily on the individual oversight of market participants (i.e. microprudential supervision), without paying sufficient attention to the overall exposure of the financial system to systemic risks (macroprudential supervision).
This observation resulted in a considerable strengthening of the oversight of financial players and activities around the world. In Europe, upon the recommendation of Jacques de Larosière, Honorary Governor of the Banque de France, lawmakers established the European System of Financial Supervision (ESFS) on 24 November 2010, which includes the European Systemic Risk Board (ESRB) and the national macroprudential authorities. The ESRB is responsible for the “macro-prudential oversight of the financial system within the [European] Union in order to contribute to the prevention or mitigation of systemic risks to financial stability in the Union”. The broad composition of the ESRB ensures a cross-cutting approach to the identification of systemic risks, with the participation of national central banks and sectoral supervisory authorities.
Over the past fifteen years, the ESRB has achieved significant results in several areas (Rehn et al., 2024). In particular, it has established a common framework for European macroprudential policy and leveraged the soft law instruments at its disposal.
The ESRB now faces new challenges that are leading to changes in its remit, including the increasing role of the European Central Bank (ECB) since the creation of the Single Supervisory Mechanism for banks, as well as the effects of Brexit. It is also necessary to identify risks as early as possible through stress tests conducted across the entire financial sector. Lastly, it is essential to simplify systemic risk prevention and to enhance its effectiveness (Villeroy de Galhau, 2025).
1 The ESRB was created to coordinate European macroprudential oversight
The 2008 financial crisis exposed significant shortcomings in the system of financial supervision. It did not take sufficient account of “systemic risk”, i.e. the risk that disruptions could affect the stability of the entire financial system. That is why, at the London summit held in April 2009, G20 leaders committed to adopting a macroprudential oversight framework aimed at preventing or mitigating systemic risk.
Within the European Union, the ESRB has been tasked with (i) detecting systemic risks to the stability of the financial system and, where necessary, (ii) alerting the relevant national or European authorities4 so they can assess whether corrective measures need to be taken. …
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Updated on the 12th of February 2026