Memorandum of Understanding on cross-border cooperation in the area of financial stability
The Memorandum of Understanding on Cooperation between the Financial Supervisory Authorities, Central Banks and Finance Ministries of the European Union on Cross-Border Financial Stability took effect on 1 June 2008.
The Memorandum is designed to facilitate the management and resolution of cross-border systemic financial crises in a way that minimises the economic and social costs of a crisis, while promoting market discipline and limiting moral hazard. The MoU includes 118 signatories from 27 Member States and the ECB.
The creation of an agreement on common principles and practical arrangements to be applied in the case of cross-border financial crisis reflects the ongoing integration of financial markets and market infrastructures in the EU, the growing number of large financial institutions and the ensuing higher risk of cross-border contagion affecting more than one Member State.
The Memorandum defines procedures and practical arrangements for the involvement of all relevant parties in a crisis situation and the preparation hereof, while respecting the existing legal responsibilities of competent authorities.
Pavel Zúbek
CNB Communications Department