THE SINGLE SUPERVISORY MECHANISM (SSM)

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The main elements of the Single Supervisory Mechanism 125
now become another striking example of this trend. Nevertheless, the creation
of ‘Chinese walls’ within the central bank is an essential element to ensure the
adequate separation of its monetary policy and other tasks from its (new) su-
pervisory tasks.
5.2 General provisions
5.2.1 The provisions of the SSM Regulation
5.2.1.1 The rules
The principle of separation of monetary policy and micro-prudential supervi-
sory tasks of the ECB (due to the difference of their objectives as already men-
tioned), by creating ‘Chinese walls’ within it is established in recital 65.
Recital 65 reads as follows:
“The ECB is responsible for carrying out monetary policy functions with a view to
maintaining price stability in accordance with Article 127(1) TFEU. The exercise of
supervisory tasks has the objective to protect the safety and soundness of credit in-
stitutions and the stability of the Ànancial system. They should therefore be carried
out in full separation, in order to avoid conÁicts of interests and to ensure that each
function is exercised in accordance with the applicable objectives.
The ECB should be able to ensure that the Governing Council operates in a com-
pletely differentiated manner as regards monetary and supervisory functions. Such
differentiation should at least include strictly separated meetings and agendas.”
In this respect, Article 25 lays down the following two (2) rules:466
(a) When carrying out the speciÀc supervisory tasks conferred upon it by
the SSM Regulation, the ECB must “pursue exclusively the objectives set there-
in” according to Article 1 (Àrst sub-paragraph).467
(b) The ECB must also carry out these tasks ‘separately’ from both its tasks
relating to the deÀnition and implementation of the single monetary policy (ac-
investment Àrms. In addition, the above Act established the Financial Conduct Author-
ity as a conduct of business regulator. Finally, an independent Financial Policy Commit-
tee (‘FPC’) was also established, entrusted with the objective of Ànancial stability and
macro-prudential Ànancial oversight. On the most recent work of the PRA, see Bank
of England (2014) . Its publications are available at:
pra/Pages/publications/default.aspx.
466. See also Article 13k of the ECB Rules of Procedure.
467. SSM Regulation, Article 25, paragraph 1.