Financial stability council

The Financial Stability Council (FSC) is the central body for macroprudential supervision in Liechtenstein. It has been legally established in May 2019 by creating an institutional framework for macroprudential policy and supervision. The responsibility for financial stability and macroprudential policy and supervision is spread among several institutions. According to Article 4 FMA Act, the FMA safeguards the stability of the Liechtenstein financial market, the protection of customers, the prevention of abuse, as well as the implementation of and compliance with recognized international standards. The tasks of the FMA arise from its role as being the competent authority for macroprudential supervision and safeguarding financial stability by using macroprudential instruments, recommendations and warnings. The government decides on the introduction of macroprudential instruments within the framework of the existing legislation and, thereby, defines the operating framework of macroprudential supervision in Liechtenstein.

The FSC was established to foster financial stability and to reduce systemic and procyclical risks in Liechtenstein's financial sector. The FSC is composed of representatives of the Ministry for General Government Affairs and Finance (MPF) and the FMA and is chaired by a member of the MPF. The FSC's main task include the discussion of issues relevant to financial stability while strengthening the cooperation and the exchange of views among the macroprudential institutions represented in the council.

The key task of the FSC is to address systemic risks to financial stability, as identified by the FMA in the scope of their monitoring activities, in a transparent and comprehensive process. To this end, the FSC uses available macroprudential instruments, warnings and recommendations The FSC holds meetings at least four times a year.


The key objective of macroprudential supervision in Liechtenstein is to safeguard the stability of the financial market in Liechtenstein. A stable and sound financial system as a whole is a prerequisite to fulfill its economic functions. As a consequence, macroprudential policy contributes to the overarching objective of achieving sustainable economic growth in Liechtenstein.

To operationalize this key objective of fostering financial stability, macroprudential supervision in Liechtenstein follows the recommendations of the European Systemic Risk Board (ESRB) and defines the following five intermediary goals:

  • preventing excessive growth and leverage;
  • preventing excessive maturity mismatch and market illiquidity;
  • preventing direct and indirect exposure concentration;
  • limiting the systemic impact of misaligned incentives with a view to reducing moral hazard;
  • strengthening the resilience of financial infrastructures.


The key task of macroprudential supervision and the FSC, respectively, is the continuous and preventive monitoring and assessment of systemic risks for the Liechtenstein financial sector. This preventive risk identification as well efficiently addressing the identified systemic risks poses a big challenge to macroprudential supervision.

The explicit tasks of the Financial Stability Council have been defined in Article 33b of the FMA Act:

  • discussing issues relevant to financial stability;
  • encouraging cooperation and the exchange of opinions among the institutions represented on the Council in normal times and in times of crisis;
  • discussing warnings and recommendations of the European Systemic Risk Board;
  • issuing recommendations to the government or the FMA in connection with the use of instruments for safeguarding the stability of the financial market;
  • issuing warnings and recommendations in accordance with Article 33c FMA Act; 
  • presenting a report to the parliament on an annual basis.