On 27 September 2024, the European Systemic Risk Board (ESRB) published a speech by Olli Rehn (First Vice-Chair of the ESRB and Governor of the Suomen Pankki) entitled Old and new frontiers of the ESRB: Systemic risk, non-banks and data analysis.

The speech covers three issues – the ESRB’s track record, key starting points for the forthcoming ESRB review and new frontiers, especially dealing with non-banks and better use of data and analysis.

In terms of dealing with non-banks the speech notes that the ESRB has been developing the concept of ‘macroprudential policy stance’ to analyse the way in which national authorities are using macroprudential tools to mitigate the systemic risks to which their financial sector is exposed and several ESRB members have provided feedback underlining the need to better understand systemic risks related to non-bank financial institutions (NBFIs). Mr Rehn also adds that the ESRB has already engaged in risk monitoring and analysis of the non-bank sector and has identified certain structural vulnerabilities but that more work is needed to better understand the systemic risks of the non-bank sector in the same depth as those for the banks.

Mr Rehn also emphasises the importance of data in the sense that in order to understand the systemic risks related to NBFIs, better data is needed in order to be able to identify and map vulnerabilities and interconnections. When this is done the ESRB can capitalize on more advanced methods, such as system wide stress-testing, to locate the vulnerabilities in the system.