What is the SSM

07/01/2025

The 2008 financial crisis showed how quickly and intensely financial sector problems can spread, especially in a monetary union, and how these problems can directly affect citizens across Europe.

With the aim of restoring confidence in the banking sector and increasing banks’ resilience, the Single Supervisory Mechanism (SSM) was established in 2013, which is the European banking supervision system composed of the European Central Bank (ECB) and the national competent authorities (NCAs) of the participating Member States. Participants in the SSM are all Eurosystem member countries as well as all European Union countries which, outside the euro area, wish to establish close cooperation with the ECB and thus benefit from this supervisory system.

In particular, the main objectives of such European banking supervision are:

• Ensure the safety and soundness of the European banking system;
• Enhancing financial integration and stability in Europe; and
• Ensure consistency of supervision.

To ensure more effective supervision, banks are classified under the SSM as significant and less significant.Abre en ventana nueva

• In the case of significant institutions, the ECB exercises direct supervision, which is articulated through the Joint Supervisory Teams (JSTs), responsible for the day-to-day development of supervisory activity over these institutions. These teams consist of staff from the ECB and the NCAs. Among other functions, these teams carry out a continuous assessment of the risk profile and the adequacy of the solvency and liquidity of the institutions,and are responsible for preparing the decision proposals for submission to the Supervisory Board.

Without prejudice to this, NCAs should assist the ECB by providing their expertise and the bulk of supervisors integrated into JSTs. In addition, among other tasks, they support the conduct of on-site inspections, collect and transmit the information required, participate in the preparation of supervisory decisions and collaborate in sanctioning processes.

• For less significant institutions, it is the NCAs that carry out their direct supervision, while the ECB exercises indirect supervision. In such cases, the ECB, in its role as ultimate responsible for the functioning of the SSM, may issue guidelines to ensure the consistency of supervision in its member countries, request additional information or even assume direct supervision of any of these entities if it deems it necessary.

For more detailed information, you can consult the website of the European Central BankAbre en ventana nueva, or the Banco de España.Abre en ventana nueva

“Disclaimer: Please note that this is a translation of the original in Spanish that has been obtained using eTranslation (the machine translation tool provided by the European Commission), with the intention of giving you a basic idea of the content in English until a human translation becomes available. The Banco de España accepts no liability whatsoever in connection with this translation.”