Single Supervisory Mechanism (SSM): Guide to Banking supervision


Single Supervisory Mechanism (SSM)

Guide to Banking supervision

This guide is an important milestone in the implementation of the Single Supervisory Mechanism (SSM), the new system of financial supervision comprising, as at October 2014, the European Central Bank (ECB) and the national competent authorities (NCAs) of euro area countries. It was issued in accordance with the inter Institutional Agreement between the European Parliament and the European Central Bank (ECB).

The ECB published this guide before it took over its supervisory tasks on 4 November 2014 to provide practical guidance and to support stakeholders in their preparation. It is a practical tool that will evolve through regular updates to reflect new experiences that will be gained in practice.

The SSM is based on 9 supervisory principles which are:

Principle 1 – Use of best practices
Principle 2 – Integrity and decentralisation
Principle 3 – Homogeneity within the SSM
Principle 4 – Consistency with the Single Market
Principle 5 – Independence and Accountability
Principle 6 – Risk based approach
Principle 7 – Proportionality
Principle 8 – Adequate level of Supervisory Activity for all Credit Institutions
Principle 9 – Effective and timely corrective measures

The SSM guide presents also the conduct of supervision, which is based on the following pillars:
1 Authorisations, acquisitions of qualifying holdings, withdrawal of authorisations
2 Supervision of significant institutions
3 Supervision of less significant institutions
4 Overall quality and planning control

This guide is not a legally binding document and cannot be in any way, substitute for the legal requirements laid down in the relevant applicable EU Law.

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