Single Banking Supervision Mechanism

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The unified bank supervision mechanism ( english S ingle S upervisory M echanism, SSM ), even single European banking supervision mechanism and colloquially central European banking supervision , euro bank supervision or ECB Banking Supervision called, is one of the central pillars of the European banking union . With this mechanism, the European Central Bank (ECB) took over the supervision of banks in the euro zone on November 4, 2014 , whose total assets account for over 30 billion euros or 20 percent of a country's economic output.

backgrounds

Due to the negative experiences of the global financial crisis from 2007 and the euro crisis from 2009, efforts in the European Union to strengthen uniform regulation of the European financial markets increased . As a result, the European System of Financial Supervision was established in 2011 with three European Financial Supervisory Authorities for banking ( EBA ), insurance ( EIOPA ) and securities ( ESMA ). The system stipulated that the regulation of the financial markets would largely be decided at European level, but compliance with the standards would continue to be monitored primarily by the national supervisory authorities of the EU countries. As a result of further developments, in particular the sovereign debt crisis in Cyprus since 2011, when the national banking supervisory authority had not responded adequately to the crisis, the newly established system of European financial supervision has already been called into question again.

development

On June 29, 2012, the heads of state and government of the EU member states agreed in principle at a summit meeting in Brussels on the establishment of a central banking supervisory authority at the European Central Bank for the 17 EU countries that have introduced the euro as their currency. The transfer of supervision to the ECB should therefore not create a new European authority, but rather the ECB will be given "special tasks in connection with the supervision of credit institutions". On September 12, 2012, the European Commission presented its plans for uniform banking supervision. These envisaged placing all around 6,000 banks in the euro zone under the supervision of the ECB as early as 2013. This was criticized by Federal Finance Minister Wolfgang Schäuble , who called for it to be limited to large, systemically important banks.

On December 13, 2012, the European finance ministers agreed on key points for creating a uniform banking supervisory mechanism. It was decided to only transfer banking supervision to the ECB for systemically important large banks, whose total assets account for over 30 billion euros or 20 percent of a country's economic output. This means that only around 150 to 200 of the total of around 6,000 banks in the euro zone fall directly under the control of the ECB. The rest will continue to be monitored by the national supervisory authorities. In Germany, the savings banks and Volksbanks in particular are exempt from central control. However, in justified cases, such as when banks receive financial assistance, the ECB can take control. ECB President Mario Draghi makes it clear that the full assumption of the new task - and thus also full responsibility - will not be possible until twelve months after the start of operations at the earliest. He named March 2014 as the target date. Even in the event that “ everyone needs Preparations at the working level at the European Central Bank have been completed in good time, it should be even later, ” said Yves Mersch , member of the ECB's Executive Board . So "it could [only] be in September, October or November 2014" .

On March 19, 2013, the Council of the European Union announced that an agreement had been reached with the European Parliament on a legal basis for the establishment of a central European banking supervisory authority. On June 13, 2013, in connection with the euro crisis , the Bundestag passed a law to establish uniform banking supervision, which also allows banks that have got into financial difficulties to be recapitalized with funds from the European Stability Mechanism (ESM) . So far, this has only been allowed to make aid payments to states. Germany's condition for this was the introduction of central supervision over the European credit institutions, which had already been decided at the EU summit in November 2012 without any specific design. On September 12, 2013, the legal basis for the establishment of the central banking supervision was formally passed by the European Parliament.

In preparation for the assumption of uniform banking supervision, the ECB carried out an in-depth examination (also known as "Banken-TÜV" or "Bilanz-TÜV"). By autumn 2014, the balance sheets of 130 major banks from the 18 countries of the euro zone were checked. The selected institutes also include those whose total assets are just below the specified threshold of 30 billion euros. The audit consisted of a retrospective review of assets ( asset quality review ) and future-oriented stress tests based on scenarios . The results were published on October 26, 2014; In the process, 25 European banks (including one in Germany) were found to have insufficient capital resources.

The ECB officially took over its new banking supervision tasks in autumn 2014, twelve months after the regulation came into force.

organization

Seat and equipment

The ECB has been based in Frankfurt am Main since it was founded in 1998 . In 2014 the ECB partly moved into the new ECB complex in Frankfurt's Ostend. Since it was not foreseeable when the new building was being planned that the ECB would be entrusted with uniform banking supervision, there is not enough space for the approximately 1,000 employees. The ECB therefore decided to use its current headquarters, the Eurotower in downtown Frankfurt, for the employees of the banking supervision in the future. Since the Eurotower was first refurbished after the ECB moved in the second half of 2014, the banking supervision was temporarily housed in the Japan Center .

Seat of the banking supervision, the Eurotower in Frankfurt am Main

Tasks of the ECB banking supervision

The SSM basically extends to the member states of the euro currency area . EU member states whose currency is not the euro can voluntarily participate in the new European banking supervision. To this end, the ECB and the national supervisory authorities of the relevant member states agree to work closely together; the member states thus become “participating member states”. The close cooperation can be terminated by either the member states or the ECB.

The SSM defines how the single banking supervision is organized by the ECB and the national supervisory authorities. Whether a bank falls under the direct supervision of the ECB or is 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 a balance sheet total of more than 20 percent of the economic power of their country, but at least a balance sheet total of 5 billion euros,
  • Banks that have received or applied for direct public funding from the EFSF or the ESM ,
  • the three largest banks in each participating state.

In addition, the ECB can also declare cross-border banks that do not meet the criteria for significance to be significant in individual cases. In the case of less significant institutions, only the national supervisory authorities act. With the start of the SSM at the beginning of November 2014, the ECB will take over direct supervision of 120 banking groups in the euro area, which represent almost 85% of the total assets of all banks in the euro area. In Germany, the ECB will take over the direct supervision of 21 groups. The direct supervision of around 3,600 insignificant institutions in the euro area will initially remain with the respective national supervisory authorities of the member states. These include around 1,700 German institutes which are still subject to direct supervision by the Federal Financial Supervisory Authority (BaFin) and the Bundesbank.

The European Banking Authority (EBA), based in Paris (formerly London ), only has the right in exceptional cases to make a binding decision vis-à-vis the national supervisory authorities or even directly vis-à-vis the banks. The main task of the EBA is to align the rules for banking supervision applicable in the individual EU member states and to promote the exchange between the national supervisory authorities.

Separation of monetary policy and banking supervision within the ECB

A new supervisory board will be set up within the ECB to carry out the tasks of uniform banking supervision , which will plan and carry out the supervisory tasks . This supervisory body consists of a chairman with a five-year term (re-appointment not permitted), a vice-chairman ( chosen from among the members of the Executive Board of the ECB ), four representatives from the ECB and one representative from the relevant national supervisory authority of each participating country . The Italian Andrea Enria has been the chairman of the supervisory board since January 1, 2019 . Previously, from January 1, 2014, it was the French Danièle Nouy .

criticism

Many “central bankers”, including Bundesbank President Jens Weidmann, felt uneasy about the ECB model adopted in 2013. They saw the independence of the central bank according to the model of the Deutsche Bundesbank at risk with the new task as supervisor of the banks . Until the introduction of the euro, the Deutsche Bundesbank, as the supreme monetary guardian, was exclusively committed to one main monetary policy objective - namely that of price level stability  - and has done so continuously since its foundation in 1949, independently of changing governments and their economic policy programs.

Web links

Individual evidence

  1. ↑ Tagesschau.de: Night shift brings breakthrough at EU summit
  2. ↑ europarl.europa.eu: Legislative resolution of the European Parliament of 12 September 2013 on the proposal for a Council regulation on the delegation of specific tasks in connection with the supervision of credit institutions to the European Central Bank (COM (2012) 0511 - C7-0314 / 2012 - 2012/0242 (CNS))
  3. ↑ Tagesschau.de: EU Commission wants uniform supervision for banks
  4. ↑ Handelsblatt.com: EU finance ministers agree on banking supervision
  5. ↑ Schäuble prevails - ministers agree on Merkur Online banking supervision , accessed March 22, 2013
  6. ↑ ECB banking supervision should not start until autumn 2014 ORF of June 27, 2013, last accessed June 30, 2013
  7. ^ FAZ.net: Agreement on EU banking supervision
  8. ↑ Bundestag votes in favor of transferring banking supervision to the German Bundestag on June 13, 2013, last accessed June 23, 2013
  9. ↑ europarl.europa.eu: Legislative resolution of the European Parliament of 12 September 2013 on the proposal for a Council regulation on the delegation of specific tasks in connection with the supervision of credit institutions to the European Central Bank (COM (2012) 0511 - C7-0314 / 2012 - 2012/0242 (CNS))
  10. ↑ Welt.de: EU Parliament clears the way for banking supervision
  11. ↑ A detailed review by the ECB shows that the banks need to take further measures. ECB press release. October 26, 2014, accessed February 20, 2015 .
  12. ↑ 25 banks fail the ECB stress test - one German, nine Italian. manager magazin online, October 26, 2014, accessed on February 20, 2015 .
  13. ↑ European Central Bank Banking Supervision ( Memento of October 29, 2013 in the Internet Archive )
  14. ↑ Press release of the ECB on the location decision
  15. ↑ fr-online.de: Checkers in Japan Center
  16. ^ Bundesbank.de: Questions and answers on European banking supervision
  17. ↑ Bundesregierung.de: Uniform European banking supervision ( Memento of October 29, 2013 in the Internet Archive )
  18. ^ Bundesbank.de: Questions and answers on European banking supervision
  19. ↑ Bundesregierung.de: Uniform European Banking Supervision ( Memento of the original from October 29, 2013 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice.  @1@ 2Template: Webachiv / IABot / www.bundesregierung.de
  20. ↑ The start of the banking union - the single supervisory mechanism in Europe. (pdf) In: Monthly Report October 2014. Deutsche Bundesbank, October 2014, p. 48 , accessed on February 9, 2015 .
  21. ↑ Bundesfinanzministerium.de: Questions and answers on financial market supervision
  22. ↑ www.ecb.europa.eu: Banking supervision ( Memento of April 21, 2014 in the Internet Archive )
  23. ↑ European Central Bank: Andrea Enria takes helm of ECB Banking Supervision. Retrieved December 11, 2019 .
  24. ↑ handelsblatt.com: Nouy heads the European banking supervision
  25. ↑ States and Parliament - Agreement on EU Banking Supervision. FAZ.net (Jens Weidmann is skeptical, Frankfurt, March 19, 2013)