On 29 September 2022, the European Systemic Risk Board issued a press release reporting on the meeting that its general board held on 22 September 2022.
At the meeting, the general board issued a warning on vulnerabilities in the EU’s financial system. The general board concluded that risks to the financial stability in the EU and the probability of tail-risk scenarios materialising have increased.
The general board also covered two reports from its Advisory Scientific Committee that will be published in the coming month. The first report focuses on two specific instruments that central banks around the world have used: enhanced lending operations and direct interventions involving purchases of illiquid financial instruments. It explains the design and potential costs of both instruments as well as the rationale behind them. The second report analyses whether bank capital requirements can be an effective tool for reducing carbon emissions and dealing with prudential risks arising from climate change. The report concludes that while bank capital requirements can effectively address prudential risks arising from climate change, they are not likely to be the most effective tool for reducing carbon emissions.