European Commission Reports on Single Supervisory Mechanism

The European Commission has published a report, addressed to the European Parliament and the Council of the European Union, on the Single Supervisory Mechanism. The Banking Union is made up of the SSM, the Single Resolution Mechanism and the deposit guarantee scheme. The SSM is the first pillar of the Banking Union, which the European Authorities are aiming to complete by the end of 2019. The SSM is made up of the European Central Bank and national regulators of Eurozone Member States, and implements the prudential policy and requirements of all banks in the euro area. The ECB directly supervises the larger firms, classified as significant institutions, and national regulators directly supervise the less significant institutions, subject to the oversight of the ECB.

The SSM Regulation requires the Commission to evaluate the effectiveness of the SSM, "with a special emphasis on monitoring the potential impact on the smooth functioning of the internal market". The report presents the Commission's first review of the SSM and focuses on the legislative, institutional and procedural framework of the SSM.

The European Commission provides a positive assessment of the application of the SSM Regulation and the first years of the ECB acting in its supervisory capacity. The Commission considers that the benefits of a level playing field, market integration and financial stability are clear. The Commission does not consider that any significant amendments to the SSM Regulation are warranted at this time. Any shortcomings that the Commission notes in the report can be changed by ECB action and the November 2016 risk reduction legislative proposals.

The report was published alongside the European Commission's Communication on completing the Banking Union.

View the report.

View the accompanying staff report.

View the Communication.