The Single Supervisory Mechanism

The SSM is a new framework that ensures European banking supervision. Under the new system, the European Central Bank (ECB) will work in tandem with national supervisory authorities.

What is the SSM?

The SSM is a European supervisory framework that was launched on 4 November 2014. Since that date, supervision of banks has been a shared responsibility of the ECB and the various national supervisory authorities. The ECB has direct responsibility for the supervision of large banks,which, in the Netherlands, are ABN AMRO, SNS bank, Rabobank, ING Bank, BNG Bank and NWB Bank. With the new supervisory framework in place, all significant banks in participating EU Member States are now subject to uniform supervision. 

How does the SSM function?

Supervision-related decisions are taken by the ECB's Supervisory Board, whose members are the directors of supervision from each participating country. This ensures that the ECB will take all important supervisory decisions, making it directly responsible for supervising Europe's significantcredit institutions - 120 in total - that collectively represent almost 85% of all banking assets in the euro area. 

Direct supervision of these banks is carried out by Joint Supervisory Teams (JSTs), which work with a uniform European methodology based on best practices from the individual countries. European and local examining officers make up the team. A European examining officer leads the team. 

How does this affect DNB?

DNB bears ultimate responsibility for integrity supervision of large significant banks and supervision of all smaller financial institutions. In addition, DNB's Executive Director of Supervision, Frank Elderson, represents the bank on the ECB's Supervisory Board. DNB also plays an important part in supervising the large Dutch banks, as Dutch examining officers participate in the Joint Supervisory Teams.

Why was the SSM set up?

The SSM was set up to further strengthen and stabilise the European banks and to promote the stability of the European financial system as a whole. Furthermore, the SSM brings greater financial integration and a level playing field for the European banks.