How are supervisory decisions adopted under the Single Supervisory Mechanism?

How are supervisory decisions adopted under the Single Supervisory Mechanism?

Published: 3/6/2020

The Supervisory Board, as an internal body of the ECB, prepares the draft supervisory decisions, which are adopted by the Governing Council under the non-objection procedure: if the Governing Council does not object within a defined period of time, the decision is deemed adopted. The Governing Council may adopt or object to the proposed decisions but cannot in principle modify them. Apart from that, other decisions on the general framework (e.g. the SSM Framework Regulation) are taken by the Governing Council as part of a regular procedure.

The ECB separates objectives, decision-making procedures and supervisory tasks to prevent a conflict of interest between monetary policy and banking supervision. This includes the strict separation of Governing Council meetings with separate agendas.

National supervisory authorities, responsible for assisting the ECB in the exercise of its tasks, play an important role in the decision-making process in their own right. For example, they may propose draft supervisory decisions and they contribute expert knowledge to the decision-making undertaken by the ECB. For common procedures, the SSM Regulation explicitly provides that the ECB should take a decision on the basis of a national competent authority’s proposal.