ECB: the implementation of Single Supervisory Mechanism is going according to the plan.

11.07.2014

Press service of European Central Bank (ECB) interviewed Daniele Nouy, the Chairman of supervisory board of Single Supervisory Mechanism, which should start its work this autumn.

At interview, Miss Nouy stressed that despite the big volume of work to be done everything is going smoothly as planned. Right now supervisory board is performing the series of stress-tests for domestic banks of EU Member States.

In Nouy’s opinion, it is getting harder to control cross-border activities of domestic banks and activities of international at the national level. Since the EU territory is Single market, moreover, Eurozone has the single currency; there is need of supervisory mechanism. Under the eye of new instrument will be 3 700 financial instates. Almost 120 groups consisted of 1 200 financial institutions will be under the direct ECB supervision.

Program coordinator will be in Frankfurt together with the team of 9-10 people, which will be dealing with the biggest banks. The coordinator will analyze and submit recommendations to supervisory board. If the national authorities do not agree, their position will be mentioned in the note to the Board. But recommendations are the thing that matters the most. The decision on them will be taken by supervisory board, that consists of 6 ECD representatives and 18 representatives for EU Member States.

Expert’s opinion

The activity of the several thousands European banks will be under the ECB supervision from now on. Of course, the most attention is drawn to the biggest and the most active financial institutions. The appearance of such supervision is no to be, as the saying goes, fatal, but the situation will become more complicated. On one hand, the bank under ECB supervision, obviously, is less likely to be affected by some sort of crisis. But on the other hand, banks will be under different kinds of checkups and will be asked to toughen mechanisms of client revision and of accounts revision.

Anna Shevchenko ( Lawyer, Honest&Bright)