The General Board of the European Systemic Risk Board (ESRB) held its 27th regular meeting on 21 September 2017

The General Board continues to highlight the repricing of risk premia in global financial markets as the main risk to financial stability in the European Union (EU). Despite solid prospects of recovery in the real economy, tail risks remain elevated amid high geopolitical and policy uncertainties, both in Europe and in the global economy as a whole. These uncertainties are among the potential triggers for a repricing of risk premia in the global financial markets. The General Board noted that an episode of repricing of risk premia and a consequent rise in yields could also impact debt sustainability in the public and private sectors in some EU Member States. The General Board also discussed the vulnerabilities in the EU commercial real estate sector.

The General Board considered insights from research papers analysing EU derivatives markets data from trade repositories. The European Markets Infrastructure Regulation (EMIR) requires counterparties resident in the EU (including central clearing counterparties) to report the details of new and outstanding derivatives transactions to trade repositories. EMIR also grants the ESRB and European Securities and Markets Authority exclusive access to the full EU-wide dataset. The General Board highlighted the importance of continuing the work towards improving data quality and increasing policymakers’ understanding of the functioning of the derivatives market, with the aim of identifying possible sources of systemic risk and informing the development of macroprudential policies. A stream of research papers will be considered for publication by the ESRB Advisory Scientific Committee in the ESRB Working Paper Series.

The ESRB will release the 21st issue of its risk dashboard today. The risk dashboard is a set of quantitative and qualitative indicators of systemic risk in the EU financial system.

For media queries, please contact William Lelieveldt: William.Lelieveldt@ecb.int, +49 69 1344 7316.