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The European Central Bank (ECB) is preparing to take on new banking supervision tasks as part of a single supervisory mechanism.
The single supervisory mechanism will create a new system of financial supervision comprising the ECB and the national competent authorities of participating EU countries. Among these EU countries are those whose currency is the euro and those whose currency is not the euro but who have decided to enter into close cooperation with the single supervisory mechanism.
Specific tasks relating to the prudential supervision of credit institutions will be conferred on the ECB according to Article 127(6) of the Treaty on the Functioning of the European Union.
The main aims of the single supervisory mechanism will be to ensure the safety and soundness of the European banking system and to increase financial integration and stability in Europe.
The ECB will be responsible for the effective and consistent functioning of the single supervisory mechanism, cooperating with the national competent authorities of participating EU countries.
It is expected that the ECB will assume its new banking supervision responsibilities in autumn 2014, 12 months after the regulation creating the supervisor enters into force.
More information on the steps toward banking union can be found on the key steps page.
Under the new system of supervision, the ECB will directly supervise significant credit institutions. It will work closely with the national competent authorities to supervise all other credit institutions under the overall oversight of the ECB. The ECB may decide at any time to take responsibility for a less-significant credit institution.
Deciding on whether credit institutions are significant or not will also be based on:
Euro area countries participate automatically in the single supervisory mechanism. Non-euro area Member States can also choose to participate in the single supervisory mechanism by their national competent authorities entering into “close cooperation” with the ECB. If the ECB agrees, the decision will be published in the Official Journal of the EU.
|COUNTRY||NATIONAL COMPETENT AUTHORITY|
|Belgium||Nationale Bank van België/Banque Nationale de Belgique|
|Cyprus||Central Bank of Cyprus|
|France||Autorité de contrôle prudentiel et de résolution (ACPR)|
|Germany||Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin)|
|Greece||Bank of Greece|
|Ireland||Central Bank of Ireland/Banc Ceannais na hÉireann|
|Latvia1||Finanšu un kapitāla tirgus komisija|
|Luxembourg||Commission de Surveillance du Secteur Financier (CSSF)|
|Malta||Malta Financial Services Authority (MFSA)|
|Netherlands||De Nederlandsche Bank|
|Portugal||Banco de Portugal|
|Slovakia||Národná banka Slovenska|
|Spain||Banco de España|
The ECB and the competent authorities of other EU countries will conclude a memorandum of understanding describing how they will cooperate with one another in the performance of their supervisory tasks. The ECB will also sign a memorandum of understanding with the competent authority of each EU country that is home to at least one global systemically important institution.
It is expected that the ECB will directly supervise around 130 credit institutions, representing almost 85% of total banking assets in the euro area. This number reflects a consolidated perspective, i.e. banking groups which include a number of individual credit institutions are counted as one institution.
These credit institutions will be identified according to criteria to determine their significance. In each participating country, at least the three most significant credit institutions will be subject to direct supervision by the ECB, irrespective of their absolute size.
All other credit institutions in the participating countries will continue to be supervised by the national competent authorities. The ECB can decide at any time to exercise direct supervision of any one of these credit institutions in order to ensure consistent application of high supervisory standards.
A Supervisory Board will be established to plan and carry out the ECB’s supervisory tasks, undertake preparatory work, and propose complete draft decisions for adoption by the ECB’s Governing Council. It will be composed of:
In the period before the ECB assumes its supervision role, it will consult with stakeholders on the supervisory framework to be established.