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Stand:updated on 20.03.2019 | Topic SSM Single Supervisory Mechanism (SSM)

The Single Supervisory Mechanism (SSM) places significant banks in participating countries under the direct supervision of the European Central Bank (ECB). The SSM comprises the ECB and the national supervisory authorities of the euro countries. Non-euro area member states may participate in the SSM on a voluntary basis (as Bulgaria and Croatia have done since 1 October 2020).

The Single Supervisory Mechanism is a constituent element of the planned European banking union. The banking union is due to be complemented firstly by the European restructuring and resolution mechanism currently being negotiated and, secondly, a future planned European deposit guarantee scheme. The European supervisory structure is thus set to experience significant changes.

Legal bases for the SSM

Since the SSM Regulation was adopted on 4 November 2014, around 120 institutions – including 21 from Germany – have been subject to supervision by the European Central Bank (ECB) after being classified as significant, meaning they are particularly important for the European banking system. The ECB publishes a corresponding list of supervised institutions which also includes the reasons why each institution is classified as significant and thus falls under ECB supervision.

The basis of the new supervisory regime of the ECB is the newly adopted SSM Regulation and the amended EBA Regulation. The EBA Regulation entered into force at the end of October 2013, the SSM Regulation on 3 November 2013. After the legislation entered into force, there was a one-year transitional period during which the ECB implemented the preparations for the SSM.

The SSM Regulation is supplemented by a so-called framework regulation adopted by the ECB itself, the national supervisory authorities having participated in its drafting through joint working groups with the ECB. The ECB launched the public consultation for the framework regulation on 7 February 2014, which was followed by the adoption of the SSM Framework Regulation in April 2014. The SSM Regulation and the SSM Framework Regulation set out the fundamental principles governing collaboration within the SSM. In addition, further details of European supervision are being developed in joint commissions of the ECB and the national supervisory authorities.

Division of labour between ECB and national supervisory authorities

The SSM comprises the ECB and the national supervisory authorities of the euro countries. Non-euro area member states may participate in the SSM on a voluntary basis by entering into a “close cooperation” under Article 7 of the SSM Regulation. The ECB has now established close cooperation for the first time – with Bulgaria and Croatia (as from 1 October 2020).

Significant banks with total assets in excess of €30 billion or 20% of the gross domestic product of the member state in which they are located fall under the direct supervision of the ECB. In any case, the ECB supervises the member state’s three largest institutions. This also applies to states where none of the institutions meets the two aforementioned criteria.

In the direct supervision of the significant banks, the ECB receives assistance from the national supervisory authorities. The national supervisory authorities remain responsible for supervising the less significant institutions, although the ECB may issue general requirements in this regard and will receive regular reports.

Additional information

More on this topic

Single Resolution Mechanism (SRM)

Calendar of BaFin's President in his capacity as Member of the SSM Supervisory Board

Calendar of Chief Executive Director of Banking Supervision in his capacity as SSM Supervisory Board Alternate

ECB Code of Conduct

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The Single Supervisory Mechanism (SSM) began its work in November 2014. Since then, the European Central Bank has been responsible for the direct supervision of significant banks and banking groups within the eurozone.

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