The ECB and Banking Supervision: Building Effective Prudential Supervision?

Summary:

This article analyses the competences allocated to the European Central Bank (ECB) under the Single Supervisory Mechanism Regulation and whether these powers are adequate for the ECB to be an effective macro-prudential bank supervisor. These competences will allocate new powers and responsibilities to the ECB.

This unprecedented transfer of sovereignty from participating Member States to a European Union institution raises important legal and economic policy issues regarding the optimal design of banking regulation and supervision in Europe and internationally.