Frequently asked questions

Section 1 – Who we are

What is the Single Supervisory Mechanism?

The Single Supervisory Mechanism (SSM) is the system of banking supervision in Europe. It is one of the pillars of the banking union comprising us – the ECB – and the national supervisory authorities of all euro area countries. Other EU countries that have decided to participate in supervision are also part of the SSM.

Its main aims are to:

• ensure the safety and stability of the European banking system;
• increase financial integration and stability in Europe.

Why do we need European banking supervision?

Financial crises have shown how quickly and forcefully problems in the one country’s financial sector can spread to another, especially in a monetary union like the euro area. These problems can then directly affect people and their money.

We work to protect the financial system and maintain trust in Europe’s banking sector. Our common European supervision mechanism means we supervise banks in all participating countries in a consistent way.

Which countries participate in banking supervision?

There are 21 countries participating in banking supervision. 20 of these countries are using the euro and automatically participate in European banking supervision. EU countries that don’t have the euro as their currency can also decide to participate through “close cooperation” with the ECB. One of these countries is Bulgaria.

The ECB may conclude memoranda of understanding with the national supervisory authorities of EU countries that aren’t participating in supervision and those of non-EU countries to coordinate the supervision of relevant banks and their cross-border subsidiaries and branches.

Section 2 – How our supervision works

What is the ECB’s exact role?

We have been supervising Europe’s biggest banks since November 2014. We do this by:

• granting and withdrawing the licences of all banks in the participating countries;
• assessing the acquisition and disposal of holdings in banks;
• ensuring banks comply with all requirements laid down in EU banking rules and setting, where necessary, higher prudential requirements for banks to protect financial stability;
• monitoring banks’ risks on a regular basis to gauge their financial soundness and stability;
• making sure banks have effective management and sound decision-making processes in place.

How do we operate?

The Supervisory Board plans and carries out the ECB’s supervisory tasks. These include taking supervisory decisions, which are then adopted by the ECB’s main decision-making body, the Governing Council, under a non-objection procedure.

The day-to-day supervision of significant banks is carried out by Joint Supervisory Teams. Horizontal teams of experts also conduct on-site and off-site inspections and develop supervisory methodologies and guides on specific topics or risk areas.

What are the Joint Supervisory Teams?

Joint Supervisory Teams (JSTs) are one of the main forms of cooperation between the ECB and national supervisory authorities. For each significant bank, we form a team with staff from the ECB and national supervisors. The ECB coordinates the team with help from each national supervisor.

The JSTs carry out ongoing supervision of the significant banks, focusing on risk analysis and proposing supervisory programmes and appropriate actions.

Who does the ECB supervise?

Direct supervision

The ECB directly supervises more than 100 significant banks, representing around 85% of total banking assets in the participating countries.

Banks are considered significant based on:

• their size – banks which have a total asset value over €30 billion or which are one of the three biggest banks in a country;
• their importance for the economy of the country in which they are located or for the EU as a whole;
• the significance of their cross-border activities;
• whether they have requested or received financial assistance directly from the European Stability Mechanism or the European Financial Stability Facility.

Indirect supervision

The around 2,000 less significant banks in the euro area are directly supervised by their national supervisor and indirectly supervised by the ECB. However, the ECB can decide at any time to take over the direct supervision of any one of these banks to ensure high supervisory standards are consistently applied.

How can I report a breach of EU law on banking supervision?

You should report any suspected breach of EU laws relating to the ECB’s supervisory tasks to the ECB. This covers any breaches allegedly committed by supervised banks, national supervisors or the ECB itself. All information provided will be handled with the strictest confidence.

Section 3 – Staying accountable

How is the ECB held accountable for its supervision?

Several accountability arrangements are in place to hold the ECB democratically accountable for its supervisory actions, including through:

• regular discussions with the European Parliament and the Council of the European Union;
• reporting requirements with respect to the national parliaments of Member States participating in European banking supervision;
• auditing by the European Court of Auditors;
• legal control by the Court of Justice of the European Union.

How does the ECB avoid potential conflicts of interest between its supervisory and monetary policy tasks?

The separation of the ECB’s tasks is defined in EU law, so the ECB carries out its supervision independently of its monetary policy. The Supervisory Board is responsible for the supervisory side of the ECB’s activities, while the Governing Council is responsible for issues relating to monetary policy. Draft supervisory decisions are proposed by the Supervisory Board and submitted for adoption to the Governing Council.

The organisational separation of staff members who directly contribute to monetary policy tasks also serves to avoid potential conflicts of interest.

Section 4 – Consumer protection

If I have a complaint about a bank, what should I do?

If you have a complaint about your bank, please contact your bank directly or address your complaint to the authority in charge of consumer protection in your country.

The ECB supervises large and significant banks in the euro area and in countries that choose to participate in European banking supervision, but tasks such as consumer protection and combatting money laundering are outside the scope of the ECB’s duties and are therefore the responsibility of national authorities. Allegations of criminal activity fall under the jurisdiction of the appropriate national law enforcement agencies.

Can I obtain specific information about my bank from the ECB?

No. Owing to legal requirements, the ECB is not allowed to disclose information or data on individual supervised banks. Please contact your bank directly.

How does European banking supervision keep my money safe?

Strong, stable banks keep your money safe. European supervision is there to help banks carefully manage internal and external risks so they are resilient to shocks. As such, the ECB has the power to ask banks to keep more capital buffers as a safety net in the event of problems. It can also grant or withdraw bank licences and sanction banks if they breach the rules. In EU countries, deposit guarantee schemes funded by banks also ensure that deposits of up to €100,000 are protected.

If you have further questions, you can contact us using the information request form or call us on +49 69 1344 1300.