The European Single Supervisory Mechanism

31 Pages Posted: 26 Feb 2013 Last revised: 14 Mar 2013

See all articles by Eilis Ferran

Eilis Ferran

University of Cambridge - Faculty of Law; European Corporate Governance Institute (ECGI)

Valia Babis

Bank of England; University of Cambridge - Faculty of Law

Date Written: March , 2013


The European Banking Union needs a single supervisor. Therefore, the establishment of the Single Supervisory Mechanism (SSM) is the first fundamental step in centralising powers over the banking sector within the Euro Area. This article examines the significant legal issues raised by the creation of the SSM as reflected in the legislative proposals put forward by the Commission and the Council, in the light of policy considerations and political pressures. In particular, the article analyses the role of the ECB as prudential supervisor, including its scope and powers, its interaction with national supervisory authorities, governance arrangements, independence and accountability. The article also considers the implications for the non-Euro Area Member States which opt into the SSM, the Member States which choose not to participate (in particular the UK), the European Banking Authority and the European Systemic Risk Board. The article concludes by attempting a first evaluation of the emerging SSM, taking into account that many details remain to be refined. The short term challenge for the SSM will be to build up its institutional capacity. In the longer term, the SSM’s performance could be affected by its own institutional design (forged under legal constraints and political compromise) and by the arduous process of completing the single regulatory rulebook for the European Union.

Keywords: Single Supervisory Mechanism, Banking Union, ECB, Euro Area, EU single market, European Banking Authority, European Systemic Risk Board

JEL Classification: E50, E58, G18, G28, K23

Suggested Citation

Ferran, Eilis and Babis, Valia, The European Single Supervisory Mechanism (March , 2013). University of Cambridge Faculty of Law Research Paper No. 10/2013, Available at SSRN: or

Eilis Ferran (Contact Author)

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge CB3 9DZ
United Kingdom
+ 44 1223 338335 (Phone)
+ 44 1223 338340 (Fax)

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
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1000 Brussels


Valia Babis

Bank of England ( email )

Threadneedle Street
London, EC2R 8AH
United Kingdom

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

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