PensionsEurope answer to the EC consultation on the EU macro-prudential framework

The ESRB should not impose a bank-bias approach to other financial sectors, PensionsEurope e.g. stresses in its answer to the EC consultation on the EU macro-prudential framework. The current structure and organisation of the ESRB does not ensure that the ESRB is an independent body.

Policy coordination of the ECB and the ESRB with the EC, the EP, and Council should be improved to ensure financial stability. However, PensionsEurope urges to refrain from using tools or implementing measures beyond banking without evidence of systemic risk.

Due to their long-term investment perspective, pension funds pose low risk to global financial stability. Pension funds’ main investment choices are not significantly affected by temporary fluctuations of the markets. In addition to this, the regulatory framework requires that pension funds are transparent, low leveraged and diversified with prudence.

Secondly, pension funds have limited short-term liquidity needs, which make them more inclined to buy and hold assets across the entire economic cycle. They also have an ability to behave counter-cyclical. As pension funds pose no systemic risk, there is no need to include pension funds in the ESRB work.

Furthermore, PensionsEurope stresses that the impact of QE on pension funds needs further investigation and statistical reporting requirements should be coordinated. PensionsEurope does not see the merits of the envisaged ECB Regulation on statistical reporting requirements for pension funds.