Collecting Data: How will the ESRB Overcome the First Hurdle towards Effective Macro-prudential Supervision?

Abstract:

This article provides a critical assessment of the European Systemic Risk Board's ('ESRB') data collection process and examines the likely effectiveness of the legal frameworks, mechanisms and structures set out to accommodate it. It presents the various sources from which the ESRB collects its data in order to produce, where necessary, concrete warnings and remedial recommendations regarding risks to the financial stability within the EU.

The article then points to possible impediments to the smooth flow of information through these channels of information and suggests ways to refine the data collection process. It further explores two pressing areas where information gaps are most apparent: shadow banking and systematically important institutions.

It concludes that there are indeed various challenges and possible obstacles to smooth flow of information both in the legal frameworks and the practical mechanisms of the data collection process. Yet, the ESRB's information base and its data collection mandate are wide enough to tailor its macroprudential analysis needs and are far from being a duplicating effort of other national and international players.