European Banking Union A: The Single Supervisory Mechanism

Yale Program on Financial Stability Case Study 2014-5A-V1

16 Pages Posted: 14 Mar 2015

See all articles by Rosalind Wiggins

Rosalind Wiggins

Yale Program on Financial Stability

Michael Wedow

European Central Bank (ECB) - Directorate Financial Stability and Supervision

Andrew Metrick

Yale School of Management; National Bureau of Economic Research (NBER); Yale University - Yale Program on Financial Stability

Date Written: November 1, 2014

Abstract

At the peak of the Global Financial Crisis in fall 2008, each of the 27 member states in the European Union (EU) set many of its own banking rules and had its own bank regulators and supervisors. The crisis made the shortcomings of this decentralized approach obvious, and since its formation in January 2011, the European Banking Authority (EBA) has been developing a “Single Rulebook” that will harmonize banking rules across the EU countries. In June 2012, European leaders went even further, committing to a banking union that would better coordinate supervision of banks in the then 18-country Eurozone. A key component of the banking union was the Single Supervisory Mechanism (SSM), which brought banks in the Eurozone under supervision of the European Central Bank (ECB), with day-to-day assistance from existing national authorities. This case reviews the changes in Eurozone bank regulation and supervision resulting from the Single Supervisory Mechanism.

Keywords: Systemic Risk, Financial Crises, Financial Regulation

JEL Classification: G01, G28

Suggested Citation

Wiggins, Rosalind and Wedow, Michael and Metrick, Andrew, European Banking Union A: The Single Supervisory Mechanism (November 1, 2014). Yale Program on Financial Stability Case Study 2014-5A-V1. Available at SSRN: https://ssrn.com/abstract=2577316 or http://dx.doi.org/10.2139/ssrn.2577316

Rosalind Wiggins

Yale Program on Financial Stability ( email )

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

Michael Wedow

European Central Bank (ECB) - Directorate Financial Stability and Supervision ( email )

Frankfurt a.M.
Germany

Andrew Metrick (Contact Author)

Yale School of Management ( email )

165 Whitney Avenue
New Haven, CT 06511
United States
(203)-432-3069 (Phone)

HOME PAGE: http://faculty.som.yale.edu/andrewmetrick/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Yale University - Yale Program on Financial Stability

165 Whitney Avenue
P.O. Box 208200
New Haven, CT 06520-8200
United States

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