Cooperation with other institutions

The European Systemic Risk Board (ESRB) is responsible for the macroprudential supervision of the EU financial system.

It identifies systemic risks to the financial system stability in the EU and provides recommendations and warnings concerning measures to enhance the financial stability and to reduce risks. They may be addressed to the EU as a whole, one or more Member States, the European or the national supervisory authorities.

The ESRB collects information on the macroprudential measures adopted by the Member States, communicates them to other EU institutions and encourages the reciprocity of the macroprudential measures adopted by the Member States in other Member States, where necessary. The scope of the ESRB activities includes banks, insurers, asset managers, parallel banks, financial market infrastructures and other financial institutions and markets. 

The General Board of the ESRB is chaired by the President of the ECB. The voting members of the General Board of the ESRB comprise

• the President and the Vice President of the European Central Bank (ECB),
• the governors of the national central banks of the Member States,
• a member of the European Commission,
• the Chairs of the European Supervisory Authorities (the European Banking Authority, the European Securities and Markets Authority and the European Insurance and Occupational Pensions Authority),
• the Chair of the ESRB’s Advisory Technical Committee,
• the Chair and the Deputy Chairs of the ESRB’s Advisory Scientific Committee.

The representatives of Latvijas Banka also participate in the ESRB's sub-committees.

Latvijas Banka as a participant of the ESRB is involved in the assessment and analysis of the EU financial system stability and the drafting of the ESRB policy documents related to the EU financial stability.

The ECB, together with national macroprudential and microprudential authorities, strives to ensure the financial stability of the Eurosystem.

Although the macroprudential supervision of the financial system in the Member States is primarily the responsibility of national macroprudential authorities, the ECB is also entrusted with a certain macroprudential mandate.

The ECB assesses the financial stability risks in the Member States (including in Latvia) of the Eurosystem and is entitled, where necessary, to provide for more stringent macroprudential requirements than those set by national authorities (this mandate only concerns the macroprudential instruments included in the EU regulatory framework). Prior to the adoption of macroprudential decisions, national macroprudential authorities notify the ECB of the planned macroprudential measures.

The representatives of Latvijas Banka, along with the representatives of other central banks and supervisory authorities of the Eurosystem, participate in the ECB Financial Stability Committee and its subcommittees conducting assessments of the financial stability risks of the Eurosystem and coordinating macroprudential policy. The assessments and policy recommendations made by the Financial Stability Committee are discussed at the ECB's Macroprudential Forum, composed of the Governing Council and the Supervisory Board of the ECB. Macroprudential decisions in relation to the Member States of the Eurosystem are taken by the Governing Council of the ECB.

The financial systems in the Nordic and Baltic countries are closely interlinked as several Nordic banks are significant participants in many of them. Therefore, central banks and supervisory authorities have established and maintain several permanent forms of cooperation in this region.

• The central banks and national supervisory authorities of the Nordic-Baltic region cooperate on macroprudential policy issues within the Nordic-Baltic Macroprudential Forum. They discuss the assessment of the systemic risks to the financial stability and measures for their prevention as well as other financial stability issues.
• The central banks of the Nordic and Baltic countries have signed the Memorandum of Understanding on cooperation and information exchange concerning banks operating in more than one country of the region.
• Cooperation and Information exchange between the central banks, supervisory and resolution authorities as well as the Ministries of Finance of the region take place within the Nordic-Baltic Stability Group in a broader context with the aim to promote the financial stability of the region. This cooperation is based on the mutual Memorandum of Understanding. The Memorandum of Understanding has been signed by the representatives of the Ministries of Finance, central banks, supervisory and resolution authorities of Latvia, Iceland, Norway, Sweden, Finland, Denmark, Lithuania and Estonia.