The Single Supervisory Mechanism (SSM) is one pillar of banking union, the other being the Single Resolution Mechanism. On November 4, 2014, under the SSM the European Central Bank became the prudential supervisor of all banks in the euro zone. This is arguably the most significant transfer of responsibility from EU Member States to the EU since the creation of the euro and the single monetary policy in 1999. The shortcomings of the SSM, however, suggest that conferring overall prudential responsibility for banks on the ECB wasn’t anticipated under the EU’s legal architecture. Alexandria Carr, a qualified barrister practising in London as Of Counsel with the Financial Services, Regulatory & Enforcement group, discusses.

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