The EU’s Single Supervisory Mechanism
Produced in partnership with DLA Piper

The following Financial Services practice note produced in partnership with DLA Piper provides comprehensive and up to date legal information covering:

  • The EU’s Single Supervisory Mechanism
  • Background to the Single Supervisory Mechanism
  • Application and scope
  • Supervisory and investigatory powers
  • Authorisation of credit institutions
  • Sanctions
  • Organisation

The EU’s Single Supervisory Mechanism

Background to the Single Supervisory Mechanism

Following the 2008 financial crisis, there was increasing anxiety within the EU as to potential risks to the integrity of the single currency and the internal banking services market. To address these concerns and to ensure greater financial stability and promote economic recovery, the EU is in the process of finalising a European Banking Union, which is underpinned by a single regulatory rulebook for financial services. This is intended to promote the integration of banking supervision within the EU. Central to the Banking Union is the Single Supervisory Mechanism (SSM) (established by Council Regulation (EU) 1024/2013 (SSM Regulation)), which was supplemented by the SSM Framework Regulation (Regulation (EU) 468/2014). The SSM is designed to ensure that supervision of credit institutions is coherent, effective and consistent with the functioning of the internal market for financial services and the free movement of capital.

Application and scope

The SSM Regulation applies to credit institutions established within a eurozone Member State. Additionally, a Member State which is not in the eurozone can apply to be supervised under the SSM by establishing a close co-operation between the European Central Bank (ECB) and the national competent authority (NCA) in accordance with Article 7 of the SSM Regulation. To date no non-eurozone Member State has chosen to participate in the SSM. Broadly, a Member

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