This week the European Central Bank officially took over its role as supervisor of the new banking union, directly overseeing 120 major banks in the eurozone, while the chair of its supervisory board indicated a new reporting regulation would be ready by early next year.
Known as the Single Supervisory Mechanism (SSM), the new regulator is one of the major pieces of the banking union. It automatically applies to all Member States in the euro area, with other Member States able to participate if they choose to do so. The SSM directly oversees 120 of the major banks in the EU, and will work with national regulators to indirectly supervise more than 3,000 other financial institutions. The banks under direct supervision, announced in September, have assets of more than 30 billion euro, account for at least 20 percent of their home country’s GDP, or have either requested or received direct public assistance from EU bailout funds. The firms include credit institutions, financial holding companies, and mixed financial holding companies, and together represent nearly 85 percent of all banking assets in the eurozone.
