The Single Supervisory Mechanism : a sound first step in Europe’s banking union?
Working Paper European Affairs Programme.
The paper provides an analysis of the future Single Supervisory Mechanism (SSM), and its role in constructing a European Banking Union. By endowing the European Central Bank with final responsibility for bank supervision in the participating Member States, the SSM aims to improve the safety of the banking sector. However, numerous challenges await the SSM, notably: (i) developing sufficient supervisory capabilities, (ii) avoiding reputational damage for monetary policy and (iii) ensuring compatibility with the other European supervisors. By discussing the characteristics of the SSM, the paper offers an assessment of these challenges.
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