The single supervisory mechanism in action: institutional adjustment and the reinforcement of the ECB position

Abstract:

This article discusses some aspects of the functioning of the Single Supervisory Mechanism (SSM) since its launch in November 2014. By examining a number of practices developed by the European Central Bank (ECB), it argues that two important and complementary processes have characterized the functioning of the SSM so far.

First, the ECB has regulated its interactions with the national authorities in such a way to consolidate and promote supranationalism within the SSM: more precisely, transnationalism has been put at the service of supranationalism. Second, the ECB has expanded its supervisory powers, by making an extensive use of the narrow regulatory powers that it enjoys under the SSM Regulation and by using its adjudicatory powers in a quasi-regulatory manner.

Admittedly, both processes were largely predictable and do not alter the fundamental legal and institutional features of the SSM. However, they should not be considered as marginal adjustments of the legal framework established by the SSM Regulation. They are important developments, raising some concerns and capable of conditioning the future developments in the SSM.