(3)Recent institutional changes relating to the banking union, coupled with efforts to achieve a capital markets union, as well as technological change, have actually altered the ESRB’s operating environment. The ESRB should contribute to preventing or mitigating systemic risks to financial stability in the Union and thereby to achieving the objectives of the internal market. Union macro-prudential oversight of the financial system is an integral part of the European System of Financial Supervision. Institutional arrangements that effectively identify and address micro and macro-prudential risks can ensure that all stakeholders have sufficient confidence to engage in financial activities, in particular cross-border activities. By promoting timely and consistent policy responses in Member States to identified systemic risks, the ESRB should contribute to preventing diverging approaches and improving the functioning of the internal market.