German Financial Stability Committee on risks and resilience in the German financial sector
It emphasised that adequate risk provisioning was important so that financial institutions were better able to cope with potential setbacks in a challenging environment. The FSC statement then highlighted the package of measures announced by the German Federal Financial Supervisory Authority (Bundesanstalt für Finanzdienstleistungsaufsicht – BaFin) at the beginning of 2022, describing it as an important contribution towards preserving and enhancing the resilience of German financial institutions. The activation of the countercyclical capital buffer and a sectoral systemic risk buffer for loans secured by residential real estate, it explained, meant that capital had already been conserved within the system in Germany. In the view of the FSC, the capital buffers have not impaired lending.
The FSC released this statement in response to a warning issued by the European Systemic Risk Board (ESRB) to national authorities of the EU Member States on 29 September 2022 regarding vulnerabilities in the Union financial system.
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