Inside this Topic Guide
Banking Union comprises the following elements:
- the Single Supervisory Mechanism (SSM), which makes the European Central Bank (ECB) the common supervisor for euro area banks with direct supervisory responsibility for "significant" SSM banks. For less significant SSM banks, national supervisors are responsible for day-to-day supervision subject to the control of the ECB;
- the Single Resolution Mechanism (SRM), which is a system for resolving failing euro area banks and applies the Bank Recovery and Resolution Directive (BRRD) to SSM banks in a uniform manner via a Single Resolution Board (SRB) and a shared fund to cover costs paid for by banks (Single Resolution Fund - SRF); and
- a proposed European Deposit Insurance Scheme (EDIS) – in November 2015 the Commission presented a legislative proposal for a system initially based on reinsurance, which will keep in place Member States' national schemes established under the recast Deposit Guarantee Scheme Directive (DGSD2).
In addition, the system is underpinned by a facility for the direct recapitalisation of failing banks by the European Stability Mechanism (ESM).
Details of legislation establishing Banking Union are available in the legislation section of this guide.
Fundamentally, the aim of SSM and SRM is to ensure uniform implementation within the euro area of the "single rulebook" being the broader set of legislative instruments with which all EU banks (inside and outside the euro area) must comply including:
- Capital Requirements Directive/Regulation (CRD IV / CRR)
- Bank Recovery and Resolution Directive (BRRD)
- Deposit Guarantee Schemes Directive 2 (DGSD 2)
SSM – Established by SSM Regulation and EBA Amending Regulation - both in force since autumn 2013. ECB began direct supervision of significant banks and began oversight of SSM on 4 November 2014.
EDIS – Commission launched legislative proposal for Regulation amending the SRM Regulation to establish a European Deposit Insurance Scheme on 25 November 2015.
|Next:||EU Council and EU Parliament are considering the Commission's legislative proposal for the EDIS through the ordinary legislative process. Future progress on the proposal is unclear.|
|Marc Benzler (Frankfurt)||Frank Graaf (Amsterdam)|
|Chris Bates (London)||Steve Jacoby (Luxembourg)|
|Lucio Bonavitacola (Milan)||Frédérick Lacroix (Paris)|
|José Manuel Cuenca (Madrid)||Caroline Meinertz (London)|
|Caroline Dawson (London)||Ute Brunner-Reumann (Frankfurt)|
|Simon Gleeson (London)||Deborah Zandstra (London)|