What is the Single Supervisory Mechanism (SSM)?
As a result of globalization, many banking groups in the European Union have moved their services to other European countries and non-EU countries. This globalization has had some consequences for banks. The financial crisis has shown the necessity of an integrated banking supervision on a Union level. Supervisory authorities must be able to oversee highly complex and inter-connected markets and institutions in the EU and take necessary measures in order to maintain financial stability and increase the positive effects of market integration. Creating a single rulebook for financial services in the EU and one-hand supervision of banks holds a great importance for ensuring financial stability and increasing trust in financial institutions. This supervisory task is carried out by the European Central Bank (ECB).
PwC SSM Office offers you the latest information and solutions for dealing with the ECB supervisory approach under the Single Supervisory Mechanism (SSM).
Background
Single Supervisory Mechanism (SSM)
The SSM refers to the system of banking supervision in Europe. It comprises the ECB and the national supervisory authorities of the participating countries. The main aims of European banking supervision are to:
- ensure the safety and soundness of the European banking system
- increase financial integration and stability
- ensure consistent supervision
The ECB sets the requirements for a significant bank and directly supervises these banks in the participating countries, cooperating closely with the national supervisors. To qualify as significant, banks must fulfill at least one of these criteria:
- Size – total value of its assets exceeds 30 billion Euro
- Economic importance – for the specific country or the EU economy as a whole
- Cross-border activities – total value of its assets exceeds 5 billion Euro and the ratio of its cross-border assets/liabilities in more than one other participating Member State to its total assets/liabilities is above 20%
- Direct public financial assistance – it has requested or received funding from the European Stability Mechanism or the European Financial Stability Facility
- A supervised bank can also be considered significant if it is one of the three most significant banks established in a particular country.
| 1,100 Supervisors | 4,700 Supervisors |
| More than 1,100 supervisors at the ECB | More than 4,700 supervisors at national authorities |
| 115 Significant Banks | 2,552 Less Significant Banks |
| 115 significant banks under direct ECB supervision, representing 81% of euro area banking assets | 2,552 less significant banks under direct national supervision, representing 19% of euro area banking assets |
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