Cooperation in the field of financial stability
The increasing integration of the financial markets in the last years led to the emergence of a world market where the financial institutions operate in a cross-border manner. This process has been emphasised by the financial European integration and the development of the Internal Market. Owing to this interconnectedness, the side-effects of financial vulnerabilities initially contained at the national level can rapidly spill over the borders and spread to the whole financial system via contagion channels and domino effects.
Further to article 2 (6) of its organic law, “ […] the Central Bank shall cooperate with the Government and with prudential supervision authorities at national level, as well as with the other central banks at Community and international level, to contribute to ensuring financial stability, notably within committees set up for this purpose”.
As a result, the BCL collaborates with other bodies in the field of financial stability at three levels:
Smooth cooperation and regular exchanges of information are essential conditions for maintaining financial stability, in normal times as well as in turbulent times. (...)
In the execution of its responsibilities in matters of macro-prudential supervision, the BCL actively contributes to the different committees and working groups of the European System of Central Banks (ESCB) such as the Financial Stability Committee (FSC), established in 2011 to replace the previous Banking Supervision Committee (BSC).(...)
Further to the recent financial crisis different international fora related to financial stability have increased in importance. (...)