27 January 2016

ECB: Single Supervisory Mechanism – Single Supervisory Law?

ECB's Lautenschläger argues that the regulatory playing field in Europe is not as level as it should be. She says that this state of affairs hampers the work of European banking supervision, is at odds with the objectives of banking union, and inhibits the establishment of the Single Market.

Keynote speech by Sabine Lautenschläger, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, linked to Single Supervisory Mechanism and supervisory and regulatory harmonisation in Europe.

“To me it is obvious that we have to level the regulatory playing field. Nevertheless, this is certainly an issue for legislators and not for supervisors. And national laws are the prerogative of national law-makers.” she said.

But still, there is need to acknowledge that circumstances changed when the SSM came into play. There is now an imbalance between the harmonisation of banking supervision and banking regulation. In order to fully exploit the potential of the banking union, and to reap its benefits, there is need to restore that balance.

The De Larosière report, published in 2009, provided a blueprint for harmonised banking regulation and supervision in Europe. On Page 49 of that report, the authors state that “there is no point in converging supervisory practices, if the basic financial regulations remain fragmented”. Mrs Lautenschläge fully shared that view and urged legislators to reassess the necessary degree of regulatory harmonisation against the backdrop of the European banking union.

Full speech

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