Menu

Tasks

The ECB directly supervises the significant banks in the euro area. To do so, we work together with the national supervisory authorities within the Single Supervisory Mechanism.

The less-significant banks are supervised by the national supervisory authorities while the ECB ensures a consistent approach across Europe.

Our objectives

Working together under the Single Supervisory Mechanism, the ECB and the national supervisors aim to

  • ensure the safety and soundness of the European banking system
  • increase financial integration and stability in Europe
  • ensure consistent supervision

Microprudential tools

Microprudential tools concentrate on challenging and testing the risks of individual banks. In this way, they contribute to a safe banking system in Europe.

The ECB has the power to:

  • carry out supervisory reviews, including stress tests
  • conduct on-site inspections and investigations
  • grant or withdraw banking licences
  • authorise banks’ acquisitions of qualifying holdings
  • ensure compliance with EU prudential rules
  • set higher capital requirements (“buffers”) in order to counter any financial risks
  • impose corrective measures and sanctions

Macroprudential tools

Macroprudential supervision refers to the overall approach taken to ensure the stability of Europe’s financial system by limiting the build-up of aggregate risk within the system.

The ECB can:

  • apply higher requirements for banks, such as counter-cyclical buffers
  • comment and object to measures by national authorities
ECB website: Financial stability and macroprudential policy