On September 12, the European Commission published its legislative proposals for the creation of a single supervisory mechanism (SSM) under which the European Central Bank (ECB) will supervise eurozone banks.
The Commission proposes to have the SSM in place by January 1, 2013, with a phasing-in period to facilitate a smooth transition. The current proposal envisages that from January 1, 2013, the ECB will be permitted to assume full supervisory responsibility over any bank. From July 1, 2013, all eurozone banks of major systemic importance will be ECB supervised. By January 1, 2014, all banks in the eurozone would be supervised by the ECB under the SSM.
The Commission has issued:
- A draft regulation conferring powers on the ECB for the supervision of all banks in the eurozone, with a mechanism for non-eurozone countries to opt in.
- A draft regulation aligning the existing regulation by the European Banking Authority (EBA) with the ECB’s proposed powers.
- A communication outlining the Commission's overall vision for banking union, including an EBA single European rulebook for banks as well as the SSM.
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