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It also serves to implement the ten key points for the reform of national financial supervision, which were agreed by the governing coalition on 16 December 2010.
The core component of the bill is the establishment of a Financial Stability Commission, which will monitor the stability of Germany’s financial market. The Commission will be composed of representatives from the Bundesbank, the Finance Ministry and the financial supervisor, BaFin. A representative of the Financial Market Stabilisation Agency will also participate in a non-voting capacity.
Owing to its expertise in macro-economic and financial market matters, the Bundesbank has been made responsible for helping to preserve financial stability. It has been tasked with continuously analysing factors that affect financial stability, identifying potential threats, and producing proposals for warnings and recommendations where appropriate. This will provide the basis for the Financial Stability Commission to discuss financial stability and issue its own warnings and recommendations for corrective action.
The new legislation will also change the composition of BaFin’s Administrative Council. The aim of this is to reinforce BaFin’s independence. Instead of the current 10 representatives of financial industry associations, six financial industry experts are expected to be members of the Administrative Council.