THE SINGLE SUPERVISORY MECHANISM (SSM)

Introduction

This study

mainly

intends to provide a comprehensive account of the pro-

visions of the conceptually solid, but institutionally complex, framework per-

taining to the European Single Supervisory Mechanism (SSM), which is the Àrst

pillar of the European Banking Union (EBU) and became operational on 4 No-

vember 2014. Several aspects of this framework are critically analysed, partly

in depth, but the author is fully aware that it would be too early at this stage of

the SSM’s operation to aspire to deÀnitive conclusions.

This framework forms part of the new European banking law, which has been

formulated gradually since 2008 in order to effectively address:

• problems that were identiÀed during the recent (2007-2009) international

Ànancial crisis, and

• the need for a further Europeanisation of the bank safety net, as a result

of the current and ongoing euro area Àscal and debt crisis, with a view to

establishing the European Banking Union.

The study, updated until March 2015, is structured in seven (7) Sections:

(1) Section A

provides, in Àve (5) sub-sections, an overview of the legal frame-

work of the EBU as a whole. It deals, in particular, with:

• the political agenda (under 1),

• the EBU in a historical perspective (under 2),

• the new institutional and regulatory framework pertaining to the authori-

sation, prudential supervision and prudential regulation of credit institu-

tions (under 3.2), the resolution of credit institutions (under 3.3), as well

as deposit guarantee schemes (under 3.4), and

• the remaining elements for a complete EBU,

i.e.

the provision of direct

public Ànancial assistance to credit institutions by the European Stability

Mechanism (under 4.2), the role of the European Central Bank (ECB) as a

lender of last resort (under 4.3), and the winding-up of credit institutions

(under 4.4).

Sub-section 5 contains certain Ànal remarks on European banking law in the

era of the EBU.