What is the Single Supervisory Mechanism?

What is the Single Supervisory Mechanism?

Published: 3/6/2020

The Single Supervisory Mechanism (SSM) is a joint EU framework for banking supervision , comprising the European Central Bank (ECB) and the national supervisory authorities of the participating Member States.

The main aims of the SSM include:

  • ensuring the safety and soundness of the European banking system;
  • increasing financial integration and stability; and
  • ensuring consistent supervision.

The SSM was established on 15 October 2013, when the EU Council formally adopted the Single Supervisory Mechanism Regulation following negotiations with the European Parliament. It became operational on 4 November 2014.

The ECB is responsible for the efficient and consistent functioning of the SSM, and has exclusive competence for all banks in the euro area. The ECB directly supervises significant institutions, while national supervisory authorities directly supervise less significant institutions in cooperation with the ECB.

National competent authorities remain in charge of all supervisory tasks which were not transferred to the SSM, such as consumer protection and anti-money laundering.