In 2012, EU leaders decided that euro-area banks were to be brought under supervision of the Single Supervisory Mechanism (SSM), in which the pivotal role would be played by the ECB, but national competent authorities would also have to perform many functions. This report examines how the ECB set up the SSM how it has organized its work, and which challenges it faces.
We found that a complex supervisory structure was put in place relatively quickly but the complexity of the new system is a challenge especially since the new mechanism remains too heavily dependent on the resources of the national supervisors. Thus, despite its overall responsibility, the ECB has insufficient control over some important aspects of banking supervision.
The information provided by the ECB was however not enough for the ECA to fully assess whether the ECB is managing efficiently the SSM in the areas of governance, off-site supervision and on-site inspections.