The Single Supervisory Mechanism

Challenging supervisory expectations in a transforming banking landscape

Navigating the European supervisory landscape

Times are challenging for banks. Low interest rates threaten profitability and business models, while pressure from technological change and digitalization increases, and regulatory compliance is distracting banks from responding to these challenges.

Risk functions have to share the burden of cost reduction while being able to respond to continuously increasing regulatory pressure and supervisory expectations, while legacy IT and data and reporting systems fail to respond to new risk function’s regulatory and business needs.

The introduction of the SSM drastically changed the supervisory regime for all banks in the Euro area by introducing a new supervisory philosophy, approach, technical methodology and way of supervisory interactions. Going forward these changes have large implications for the business model, governance, culture, risk management and IT-infrastructure of banks.

PwC - SSM Diagnostic

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The “SSM Diagnostic” provides you with a clarifying overview of your readiness for the Single Supervisory Mechanism (SSM) and key considerations regarding supervisory requirements. 

The SSM Diagnostic tool

The SSM Diagnostic Tool provides you with a clarifying overview of your readiness for the SSM and key considerations regarding supervisory requirements.

The simple-to-use self-assessment is aligned with the SREP of the SSM, and includes the topics Business Model Analysis, Governance & Risk Appetite Framework, Capital Adequacy, Liquidity Adequacy, and Data & Reporting.

The tool consists of five questionnaires, which can be answered at your own time and pace, and provides clear and simple results.

What does this mean for your business?

In the current environment achieving the proper balance between controls and insights, while ensuring full risk coverage, including new risk like technology, cyber, and model risk, is critical.

Banks are forced to think about their business model and profitability drivers, which are being challenged within the SSM’s Supervisory Review and Evaluation Process (SREP).

Supervisory expectations towards internal governance, with explicit focus on board functioning, and on the risk appetite frameworks (RAF), require continuous attention.

Capital and liquidity adequacy remain subject to scrutiny, for instance with regard to the ECB’s expectations on ICAAP, and quantitative decisions regarding liquidity and funding within the SREP, respectively.

When adding topics like data quality and governance, regulatory reporting capabilities, model risk management, AnaCredit, operational risk, non-performing loans and conduct risk management to the list, it becomes clear that banks call for a cost effective, technology levered, and insights oriented approach to navigate the European supervisory landscape.  

PwC ECB Office

We have a strong international network, which can help you to successfully navigate through the changing European banking landscape, by combining market-wide insight and knowledge with hands-on supervisory and regulatory experience.

By including former regulators, supervisors and banking professionals, we have built strong relationships with ECB, SSM, SRB, EBA, NCAs, IMF, ESMA and the Group of Thirty.

Our ECB Office is integral to the European network. Based in Frankfurt, Germany, in the physical proximity of the ECB, it is the central point of contact between PwC and the ECB‘s SSM Supervisory Board Chairs and Director Generals.

Regular dialogue with the SSM Supervisory Board Chairs and Director Generals enables us to help you stay abreast of regulatory thinking and anticipate changes to the regulatory agenda in the future.

By connecting you to our expertise at European level we are well equipped to help you understand and deal with regulatory and supervisory practices and challenges. 

Contact us

Anthony Kruizinga
Partner
Tel: +31 (0)88 792 65 43
Email

Burkhard Eckes
Partner
Tel: +49 30 2636-2222
Email

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