From the Single Supervisory Mechanism to the Banking Union. The Role of the ECB and the EBA

LUISS Guido Carli, School of European Political Economy, working papers

27 Pages Posted: 13 Jun 2014

See all articles by Concetta Brescia Morra

Concetta Brescia Morra

University of Rome III, Department of Law

Date Written: May 20, 2014

Abstract

The agreement on the Single Supervisory Mechanism (SSM) is an important step to create an integrated banking system in Europe. In this article we look at the powers attributed to the ECB, from a legal perspective, in order to evaluate the SSM in the broader European architecture of banking supervision. We focus on three issues: the coexistence of more authorities with the same functions on a different perimeter of intermediaries in Europe, due to the UK decision to remain outside the SSM; the creation of a supervisory authority with weak regulatory powers (since these remain in the hands of European institutions and national legislators); and ambiguity over the competence to carry out early intervention powers. These issues should be addressed to increase the effectiveness of supervision. To this end, first we need an “umbrella authority” to coordinate supervision among all European countries (those that do and do not adhere to the SSM); this role could be played by the EBA. Second it is crucial to strengthen the powers of the ECB, in the regulatory field as well as for dealing with an impending crisis.

Keywords: Banking Union, Financial regulation

JEL Classification: K23

Suggested Citation

Brescia Morra, Concetta, From the Single Supervisory Mechanism to the Banking Union. The Role of the ECB and the EBA (May 20, 2014). LUISS Guido Carli, School of European Political Economy, working papers. Available at SSRN: https://ssrn.com/abstract=2448913 or http://dx.doi.org/10.2139/ssrn.2448913

Concetta Brescia Morra (Contact Author)

University of Rome III, Department of Law ( email )

Via Ostiense, 159
Rome, RM 00145
Italy

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