Publication alert: Spanish Government - Royal Decree 102/2019, that sets out the Macroprudential Authority on the Financial Stability Council (AMCESFI)
We communicate that the Spanish Government has published the Real Decreto 102/2019, por el que se crea la Autoridad Macroprudencial Consejo de Estabilidad Financiera, se establece su régimen jurídico y se desarrollan determinados aspectos relativos a las herramientas macroprudenciales.
1. Context
Since 2009, several international and European institutions such as the FSB, IMF, or the European Systemic Risk Board (ESRB), have issued recommendations on the introduction of macroprudential measures in order to address potential vulnerabilities of the financial system. Further, in December 2018 the Government issued the Royal Decree-law 22/2018, on macroprudential measures, with the aim to assign the Bank of Spain (BdE), the National Securities Market Commission (CNMV), and the Directorate General for Insurance and Pension Funds (DGSFP), the needed macroprudential tools to prevent and mitigate systemic risks.
In this context, the Spanish Government has published the Royal Decree 102/2019, that sets out the Macroprudential Authority on the Financial Stability Council (AMCESFI), establishes its legal regime, and develops certain aspects regarding macroprudential tools. In particular, this authority replaces the Financial Stability Committee (CESFI) created in 2006, and this Royal Decree sets out the structure, legal regime, functions and powers of the AMCESFI.
Moreover, with the establishment of the AMCESFI and the provision of new tools to sectoral supervisors through the Royal Decree-law 22/2018, the institutional reform of the macroprudential supervisory system is finalised.
2. Main points
- Legal status and objectives of the AMCESFI. This authority is set out as a collegial institution attached to the Ministry of Economics and Business, and aims to prevent and mitigate the systemic risk for the financial stability.
- Structure and functioning of the AMCESFI.
- Composition. This institution is composed by a Council, a Technical Committee as a support institution and those sub-committees that the Council would agree to set out. These bodies are comprised by representatives from the Ministry of Economics and Business, the BdE, and the CNMV, although it is possible to invite other public institutions (e.g. FROB or CNMC).
- Functions. The AMCESFI is responsible for analysing the potential drivers of the systemic risk; issuing opinions, alerts regarding any aspect that could impact the financial stability as well as recommendations to sectoral supervisors on the adoption of specific measures. The recipients of such AMCESFI’s recommendations should explain how they will comply with them or justify properly the reasons why they considered unnecessary or inappropriate to follow them.
- Macroprudential tools and communication procedures to the AMCESFI.
- Macroprudential tools. The BdE, the CNMV and the DGDFP could adopt macroprudential tools to prevent systemic risks according to the relevant sectoral regulation. Among such tools, they could establish countercyclical capital buffers, limits to the sectoral concentration of risks and to the granting of loans according to the value of the collateral or the debt’s capacity of firms and individuals; or the implementation of higher risk weights for real estate exposures.
- Communication to the AMCESFI. Despite the fact that sectoral supervisors are responsible for the management of macroprudential tools, according to its scope of application and expert knowledge, these supervisors should notify in advance the AMCESFI its intention to turn on, reset or disable any of these tools.
- Cooperation and coordination among authorities. The obligation to cooperate with the macroprudential authorities of other Member States, and with the relevant European institutions is regulated in this Royal Decree.
- Accountability. The AMCESFI should develop an annual public report which will address the main sources of systemic risk identified, as well as the opinions, alerts and recommendations issued. Furthermore, following the publication of this report, the AMCESFI should appear before the Committee of Economics and Business of the Congreso de los Diputados in order to communicate the systemic risk drivers addressed and the actions to be taken by the AMCESFI.
3. Next steps
- This Royal Decree entered into force by 3th March 2019 (i.e. the day following that of its publication in the Official Journal).