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The establishment of the Single Supervisory Mechanism (SSM) in November 2014 entailed a fundamental change in the architecture of EU banking supervision. Almost 130 ‘significant’ banks came under the direct supervision of the ECB. These banks represent a total asset value of € 21 trillion, or 80 % of the total asset value of banks in the euro area. Several thousand ‘less-significant’ (i.e. medium-sized and small) banks remain under direct national supervision, albeit under the ECB’s responsibility.
Since the SSM was introduced, those SAIs of euro-area countries that have a mandate to audit the supervision of banks have no longer been able to perform this role for ‘significant’ banks. At the same time, the mandate of the ECA does not explicitly include the right to audit the ECB’s supervisory mechanism for ‘significant’ banks.
EU and Member State auditors said: “We are witnessing the paradoxical situation that the audit competencies regarding banking supervision are now overall more limited than prior to the introduction of the Single Supervisory Mechanism in 2014”.