Single Supervisory Mechanism

With the single banking supervision mechanism ( English Single Supervisory Mechanism, SSM), also single European banking supervision mechanism, and colloquially central called European banking supervision, Euro - banking supervision or ECB Banking Supervision, the European Central Bank ( ECB) in 2014, the supervision of banks in the euro zone, accounts, take over their total assets over 30 billion euros, or 20 percent of the economic output of a country. With the SSM no new European authority is created, but the ECB " special tasks relating to the prudential supervision of credit institutions " are transmitted. This is Europe's first step to building a European Union bank. All EU Member States outside the euro zone is open to a voluntary participation in the SSM.

• 5.1 European Parliament
• 5.2 German Bundestag

Background

Due to the negative experiences of the global financial crisis in 2007 and the Euro crisis from 2009 grew into the European Union 's efforts to stronger uniform regulation of European financial markets. As a result, the European System of Financial Supervisors with three European Supervisory Authorities in 2011 for banking (EBA ), insurance (EIOPA ) and securities sector ( ESMA) established. The system provided that the regulation of financial markets is largely decided at the European level, adhering to the standards, however, continue to be monitored primarily by the national supervisory authorities of the EU countries. Through the further development, in particular by the sovereign debt crisis in Cyprus since 2011, when national supervisors had not adequately responded to the crisis, the just established system of European financial supervision has already been called into question.

Development

On 29 June 2012, the Heads of State and Government of the EU Member States agreed at a summit in Brussels in principle to the establishment of a central bank supervision at the European Central Bank (ECB ) for the 17 EU countries that have adopted the euro as their currency.

On 12 September 2012, the European Commission presented its plan for a single banking supervision. These provided to make all 6,000 banks in the euro zone as early as 2013 under the central authority of the ECB. This was criticized by German Finance Minister Wolfgang Schäuble, who called for a restriction on large, systemically important banks.

On 13 December 2012, the European finance ministers agreed on key points to create a single banking supervision mechanism. It was decided that the banking supervision only accounts for systemically important banks, whose balance sheet total over 30 billion euros, or 20 percent of the economic output of a country to be transferred to the ECB. Thus only about 150 to 200 of the approximately 6,000 banks in the euro zone directly under the control of the ECB. The rest will continue to be monitored by the national supervisory authorities. In Germany in particular, the savings banks and therefore are exempt from the central control. In justified cases, such as when banks receive financial aid, the ECB, however, can take control. ECB President Mario Draghi makes it clear that the full acquisition of the new task - and hence also the full responsibility - would be possible not earlier than twelve months after the start of operations, as the target date he called the March 2014 Even in the case that " all necessary. preparations were completed on time at the working level to the European Central Bank, it would be even later, " ECB Executive Board member Yves Mersch is cited by ORF.at. So " it could [ only ] in the " September, October or November 2014 " so far.

On March 19, 2013, the Council of the European Union announced that an agreement with the European Parliament on a statutory basis on the establishment of a central European Banking Supervisors had been reached.

On 13 June 2013, the parliament passed a law on the establishment of the single banking supervision, which allows even a recapitalization of financially troubled banks with funds from the European Stability Mechanism ( ESM) in the context of the euro crisis. To date, this could only afford aid payments to states. For this condition was considered Germany the introduction of a central oversight of credit institutions in Europe, already decided without concrete design at the EU summit in November 2012.

Ratification

On September 12, 2013 was the formal adoption of the legal basis for the establishment of the central bank oversight by the European Parliament. The ECB shall take over their new responsibilities in connection with the banking supervision in the fall of 2014, twelve months from the entry into force of the Regulation.

Organization

Distribution of tasks between the ECB and the national supervisory authorities

The SSM defines how the uniform banking supervision is organized by the ECB and the national supervisory authorities. Whether a bank will be included under the direct supervision of the ECB or will continue to be supervised by national authorities depends on how systemically important ( "significant" ) it is classified. The direct supervision of the ECB focuses on the significant institutions.

Be classified as significant

• Banks with total assets of more than 30 billion euros,
• Banks with total assets of more than 20 percent of the economic strength of the country, but at least a balance sheet total of EUR 5 billion,
• Get banks that direct public funding from the EFSF or the ESM or have requested
• The three largest banks in each participating state.

The ECB may also also cross- border banks that do not meet the criteria for significance, explain in individual cases significantly. In less significant institutions alone the national supervisory authorities in principle, adopt.

Demarcation between the ECB and EBA

The European Banking Authority (EBA ), headquartered in London has the right to make a binding decision against the national supervisory authorities or even directly to the banks only in exceptional cases. The objective of the EBA is primarily applicable in the individual EU Member States rules for banking supervision to equalize each other and to promote the exchange between national supervisory authorities.

Participating States

The SSM extends in principle to the Member States of the euro area. EU Member States whose currency is not the euro may voluntarily participate in the new European Banking Supervisors. To this end, the ECB and the national supervisory authorities of the relevant Member States agree on close cooperation; Member States are thus " participating Member States". The close co-operation can be canceled again by both Member States and the ECB.

Seat

Seat of the ECB since its founding in 1998, Frankfurt am Main. The financial center of Frankfurt am Main is the largest financial center in the euro zone. During the negotiations on the uniform banking supervision to Finance Minister Schäuble ready to locate a second ECB site in Paris to emphasize the separation of monetary policy and banking supervision also spatially in December 2012. It has been argued that even the Germans would have an interest in clearly separated structures if they are serious about the independence of the central bank. At precisely this independence, following the example of the Deutsche Bundesbank, Germany was founded with the ECB. So it should not be possible for the ECB to operate public finance or banking supervision, as these functions should be monitored politically by the principles of the Bundesbank. Plans for a second ECB site in Paris, however, were not pursued.

Once it became clear that the ECB's new complex in Frankfurt's Ostend the approximately 1,000 employees of banking supervision can not incorporate in addition, the ECB's current headquarters, the Euro Tower decided in Frankfurt's city center, in the future to use for employees of banking supervision.

Staff available for the ECB

The staffing of the ECB is too thin for the new role as supervisors. The Financial Times quotes from a given by the ECB in order advice that the staff of currently around 1,600 additional approximately 2,000 employees to be more than doubled. The ECB has announced until the autumn of 2014 set first 1,000 new employees.

Bank stress test

In preparation for the adoption of the single banking supervision, the ECB is a so-called " bank stress test " ( also referred to as " banks MOT " or " balance -TÜV " ) make. Here are to autumn 2014, the balance sheets of 128 large banks from the future 18 euro zone countries (Latvia is the euro on 1 January 2014 to join ) are checked. The selected institutions also include those whose balance sheet total is just below the predetermined threshold of 30 billion euros.

Possible temporary nature of the ECB's model

Maybe the supervision of the ECB but are not a permanent solution. The Dutch central banker Klaas Knot stressed that the ECB could well be considered " leave " after ten years of this task to preserve their monetary independence. The German ECB Director Joerg Asmussen had previously expressed similar views and argues for a then newly established independent authority.

Strengthening of parliamentary rights

European Parliament

A central issue in the negotiations was the question of how the independence of the central bank can be guaranteed. In the future, the European Parliament will have a number of rights to be able to carry about investigations. In addition, the MEPs will have a say in the appointment of the heads of banking supervision. This is perceived by the Committee on Economic and Monetary Affairs in the European Parliament.

German Bundestag

The German Bundestag, even every individual Members shall be granted a right to ask questions to the bank supervision. They are thus in a position to demand directly from the overseers information. However Necessary requirement for this is that the Bundestag itself changes its rules of procedure in this regard.

Affected German credit institutions

Among the 128 banks with which the ECB regarding the likely takeover of banking supervision performs a balance test ( " bank stress test"), there are 24 German banks - more than from any other country.

These 24 institutions are (in order of total assets in 2012 )

The more than 1,500 smaller German banks remain under national supervision. This task is carried out in Germany by the Federal Financial Supervisory Authority ( BaFin) in cooperation with the Deutsche Bundesbank.

Criticism

Many central bankers, including Bundesbank President Jens Weidmann feel discomfort following the decision to ECB model. You see endangers the independence of the central bank after the model of the Deutsche Bundesbank and include the new role as overseer of the banks. The German Bundesbank as the top monetary authority was in Germany to euro - introduction solely a monetary main goal - namely that of price stability - committed and did so continuously, independent of changing governments and their economic programs since its foundation in 1949.

The French EU Internal Market Commissioner Michel Barnier leaned on the resolution date very far out of the window: " My belief is that we could have avoided if we had had such a regulatory mechanism in the past almost all banking crises of recent years. "

The SPD politician Carsten Schneider criticized in the Süddeutsche Zeitung: " [...]. Bundestag going to the ECB may occur only as a supplicant, and thus can hardly take effect on [ bank ] supervisory decisions " Similarly, the chairman of the CSU group expressed in EU Parliament, Markus Ferber: "It is true that savings and cooperative banks whose business model has proven itself in crisis, do not fall under the supervision of a mammoth authority [ ... ]. "

Alexander Graf Lambsdorff, leader of the FDP - MEP, described the banking supervision as necessary, but not sufficient: " As a next step, a common framework for the orderly liquidation of banks must be placed. This is necessary in order to intervene in time for misalignment of a bank can. These mainly include capital instruments that make it possible, as shareholders and creditors of insolvent financial institutions to take responsibility. "