# Our task

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**At the Bundesbank, we have a mandate under the Financial Stability Act (*****Finanzstabilitätsgesetz*** **) to monitor the stability of the German financial system.** It is our task to identify and assess risks to financial stability. We understand financial stability as a state in which the financial system is able to perform its economic functions at all times. The financial system is made up of financial intermediaries, securities markets and market infrastructures. Our annual Financial Stability Review documents relevant developments. We identify vulnerabilities within the German financial system and highlight risks that could endanger its stability. {#par-i296i7}

**A well-functioning financial system is of crucial importance for economic development.** In the financial system, credit is provided and savings are deposited. The system makes it possible to insure against risks and make payments. Unforeseen events can jeopardise the stability of the financial system. The financial system should neither cause a downturn in overall economic activity, nor should it excessively amplify one. It must therefore be resilient. It must absorb unexpected, abrupt changes and must not amplify them.{#par-a92uai}

**Systemic risks that could jeopardise the stability of the financial system are particularly relevant here.** If one or more market participants run into difficulties, for example, the financial system's ability to function might be reduced. That could happen if market participants are very large or closely interconnected with other players. If market participants are interconnected, those links could enable adverse developments to spread throughout the financial system, impairing its stability. Systemic risks can also emerge if there are many market participants exposed to similar or highly correlated risks.{#par-i63eai}

**We share our analytical findings with the German Financial Stability Committee, which is the central body for macroprudential oversight in Germany.** We provide this Committee with our assessment of the general risk situation. If we identify risks to financial stability, we can submit proposals to the Committee for warnings and recommendations to address them. We subsequently assess the extent to which the recommendations have been implemented and inform the Committee of our assessment.{#par-eai999}

**We also contribute our analyses and perspectives at the European and global levels.** We use bodies like the European Systemic Risk Board (), the global Financial Stability Board () or the Eurosystem's Financial Stability Committee () to advance our primary topics in European and global forums.{#par-ae6o5i}

This year's Financial Stability Review takes account of developments up to 9 November 2026. See the [Glossary](https://publikationen.bundesbank.de/content/1013214) for key financial stability terms and how we use them.

*[FSB]: Financial Stability Board
*[FSC]: Financial Stability Committee
*[ESRB]: European Systemic Risk Board