The President of the Bundesbank, Jens Weidmann, attended the first meeting of the newly established Financial Stability Committee today in Berlin. The Committee, which consists of representatives from the German Federal Ministry of Finance, the Bundesbank, the Federal Financial Supervisory Authority (BaFin) and the Financial Market Stabilisation Agency (FSMA), is a core element of the Financial Stability Act (Gesetz zur Stärkung der deutschen Finanzaufsicht), which entered into force on 1 January 2013.

This development has meant a prominent new role for the Bundesbank. Under the Financial Stability Act, it has received a macroprudential mandate – the task of supervising the entire financial system – for the first time in its history. Under this mandate, it is the Bundesbank’s task to identify systemic risks, issue the Committee with warnings and recommendations and evaluate the progress and effectiveness of measures taken to ward off risks to the financial system.

“The inaugural meeting of the Financial Stability Committee marks the beginning of macroprudential oversight in Germany. It is also a landmark event for the Deutsche Bundesbank,” said Mr Weidmann. He emphasised that the Bundesbank expressly welcomed the introduction of macroprudential oversight and that, not least, it allowed Germany to comply with a recommendation by the European Systemic Risk Board (ESRB).

“Ensuring sustainable financial stability requires forward-looking prevention measures and a longer-term perspective,” said Mr Weidmann. “As a member of the Financial Stability Committee, the Bundesbank is able to contribute in an area with which it is familiar from its primary objective, price stability”.