The European Central Bank and financial stability: a quarter of a century of evolution and transformation (1998-2023)

Abstract

This article examines the evolution of the mandate and tasks of the European Central Bank (ECB) in the field of financial stability since its establishment in 1998. Over this period, the significance of the ECB’s financial stability function has increased markedly, in parallel with the growth of macroprudential policy and driven by the institutional reforms stemming from the creation of the European Systemic Risk Board in 2010 and the start of the Single Supervisory Mechanism (SSM) in 2014. To carry out its tasks, the ECB has a Financial Stability Committee, which is made up of representatives of the central banks and banking supervisory authorities of the SSM area – including the Banco de España – , that acts as an internal forum for the ECB’s governing bodies to prepare issues relating to the analysis of risks and vulnerabilities and national macroprudential policies in the banking union. Lastly, an overview is provided of the main ECB publications and public interventions in this field.