The Permanent Representatives Committee today approved a compromise agreed with the European Parliament on the establishment of a single supervisory mechanism (SSM) for the oversight of credit institutions.
The compromise, agreed on 19 March, involves two regulations: one conferring supervisory tasks on the European Central Bank, the other modifying regulation 1093/2010 establishing the European Banking Authority.
The SSM will be composed of the ECB and the supervisory authorities in the member states. The ECB will be responsible for the overall functioning of the SSM. It will have direct oversight of eurozone banks, although in a differentiated way and in close cooperation with national supervisory authorities. Non-eurozone member states wishing to participate in the SSM will be able to do so by entering into close cooperation arrangements.
The ECB's monetary tasks will be strictly separated from its new supervisory tasks, in order to eliminate potential conflicts of interest between the objectives of monetary policy and prudential supervision. To this end, a supervisory board responsible for the preparation of supervisory tasks will be set up within the ECB. Non-eurozone countries participating in the SSM will have full and equal voting rights on the supervisory board. The board's draft decisions will be deemed adopted unless rejected by the ECB governing council.
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