Sharing out tasks between the European Central Bank (ECB) and the national authorities of the 17 eurozone members under the single supervisory mechanism (SSM) is one of the controversial subjects the European Parliament and the Council will have to agree on. The EP wants to ensure that supervision will in fact be single', in other words that the ECB will have ultimate responsibility over all banks even if tasks are assigned to national authorities, Europolitics was told. The issue was discussed at length during preliminary political three-way talks on 8-9 January.

The package establishing the SSM includes a draft regulation granting the ECB supervisory powers (this requires unanimity in Council and simple consultation of the EP) and a proposal amending the regulation establishing the European Banking Authority (EBA), subject to co-decision.

The negotiations are under way. But MEPs have reminded the Council that they would negotiate the two texts as a package. If the Council is not cooperative, MEPs could use their powers as co-legislators to get what they want, to have their say on the draft regulation granting supervisory powers to the ECB.

Nevertheless, the 27 will not easily agree to substantially change the political agreement reached on 13 December after a long night of negotiations (see Europolitics 4549).


The member states' finance ministers decided to establish a number of criteria for identifying the banks that would be supervised directly by the ECB (which is what Germany wanted). In exchange, the ECB will have the right to give instructions to national supervisory authorities and have the right to intervene directly with the credit establishments. This is a two-tier condition, which France was insistent on and which ensures that there will be a single supervisory mechanism for banks, rather than a dual one, according to the Council.

But MEPs are not convinced, several sources said, explaining that the compromise is unclear and leaves too much room to interpretation. In practice, how will the criteria decided by the 27 apply? In particular, MEPs have asked to establish a list of banks that would be under the ECB's direct control. Furthermore, some wonder whether the ECB will have the power to automatically decide to take back control over a bank that it does not supervise directly. Sources also recall that entrusting tasks to national authorities should be done only for practical and operational reasons.


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