Single banking supervision and the single supervisory mechanism

• Author: Gheorghe, C. A.
• Position: Dept. of Law, Transilvania University of Brasov
• Pages: 223-228

Bulletin of the Transilvania University of Braşov • Vol. 6 (55) •No. 1 - 2013

Series V: Economic Sciences

SINGLE BANKING SUPERVISION AND

THE SINGLE SUPERVISORY MECHANISM

Carmen Adriana GHEORGHE

1

Abstract: A resolution seems to have been found for the b anking crisis. The

first steps ha ve been made towards the construction of the Economic and

Monetary Union, steps involving the single super vision of ba nks, in or der to

avoid the discount of a new financia l crisis on the expense of the EU state

members. The Single Supervisory Mechanism – SSM is to become effective as

of March 1, 2014, at the ea rliest.

Key words: single banking supervision, single authority, Eur opean Central

Bank ECB, banking regulation, banking cr isis.

1 Dept. of Law, Transilvania University of Braşov.

1. The global and European state of

affairs

A short overview of the global and

European state of affairs in terms of

banking could reveal a variety of joint

aspects that would justify the current

evolution of the financial and banking

crisis. The slow rate of the global

macroeconomic recovery, the fact that

many financial markets are not functioning

normally, that central banks have taken

action to alleviate the functioning of the

monetary markets, the fact that

governmental authorities have supported

banks in their efforts of eliminating assets

that are difficult to evaluate from their

balances and the fact that certain European

members received financial assistance

from the EU/IMF, as well as the problems

such countries have faced, all of the above

have had negative repercussions over the

European financial system, proving that

the crisis continues to exist to this day. The

bankruptcy of enterprises, the growth of

the unemployment rate, the financial losses

sustained by investors and the need for

considerable governmental bailouts in

order to avoid the crash of the banking

system have also had an unfavourable

impact on Europe’s public finances and on

its banking system. Also, the requirements

of EU/IMF support coming from certain

Eurozone members have not been

auspicious either for the efficient

functioning of the general European

economy, or for the banks active in the

Eurozone.

The Larosiere report from March 2010

proposed a new framework of international

supervision, one taking into account the

European and global dimensions of the

crisis. First of all, the report proposed a

European System of Financial

Supervision- ESFS established through the

transformation of the current European

supervisory committees into two or three

supervisory authorities. The new European

supervisory authority or authorities would

be designed to collaborate with the

national financial supervisory authorities,

which would continue to exert their

ordinary supervision competences over