| Abstract [eng] |
Following the recent global financial crisis, which has called into question the credibility of the banking sector, a need arose to implement a system that not only monitors and assesses the current situation in the banking sector, but also ensures its future stability. As a result, the Single Supervisory Mechanism (SSM) project was implemented in the European Union (EU), which became one of the pillars of the Banking Union. The SSM, based on all fundamental principles of EU law, was enshrined in law in a Council Regulation empowering the institution of the European Central Bank (ECB) to carry out prudential tasks. All EU member states that have adopted the euro have automatically joined the BPM. With thousands of credit institutions operating in the European Union, in order to make their supervision as effective as possible, the ECB has been empowered to conduct certain procedures in respect of all credit institutions in the European Union, e.g. issuance and revocation of permits. And ongoing supervisory powers were divided between the ECB and the participating members states National Supervisory Authorities (NSAs). As a result, all credit institutions in the participating Member States are divided into credit institutions that are considered important and those that are considered insignificant in accordance with the criteria set out in the Council Regulation. The ECB is responsible for the direct supervision of important credit institutions and the NSAs are less important. However, the ECB is also empowered to monitor the supervision of NSAs. The Council Regulation and other legislation governing the implementation of the SSM empower both institutions to carry out ongoing supervision of credit institutions by collecting all relevant information, which is provided by the credit institution itself or to conduct on-site investigations, as well as the supervisory review and assessment process (SREP) execution, also by taking responsibility for managing crises in credit institutions or imposing enforcement measures and sanctions. Although all euro area countries automatically join the SSM system, the possibility for non-euro area EU countries to join the SSM through a memorandum of close cooperation is foreseen. The ECB, whose primary and main powers were to conduct monetary policy, had to ensure, after the appointment of the supervisory function, that the supervisory exercise would not affect monetary policy decisions and would be carried out independently of each other. |
