The governance and ownership of significant euro-area banks

Abstract:

The new framework of European banking supervision, also known as the Single Supervisory Mechanism, established the European Central Bank (ECB) as the licensing authority for all banks in the euro area as of 4 November 2014.

As a result, and despite many lingering national idiosyncrasies (ECB, 2016a), the euro area can now be considered a single jurisdiction for banking sector policy. European banking supervision distinguishes between banks labelled significant, known as ‘significant institutions’ (SIs), and all other banks in the euro area, known as ‘less significant institutions’ (LSIs). SIs include all euro area-headquartered banking groups, and euro-area branches and subsidiaries of groups headquartered elsewhere, that have at least €30 billion in total assets, and others that have specific significance in their respective member states or because of their international interconnectedness.

The ECB directly supervises SIs, while LSIs are supervised by national authorities under the ECB’s ‘supervisory oversight’. The ECB regularly updates a list of all supervised entities, including SIs and LSIs. This Policy Contribution is based on the list as of 15 November 2016 (ECB, 2016c).