Deloitte: The SSM - Banking on the Banking Union

09 May 2014

The third in the series of papers by the EMEA Centre for Regulatory Strategy provides a view on questions relating to regulatory relationships, the supervisory approach and the implications of the new resolution process.

The Banking Union emerged from the commitment of the European Commission, Council and Parliament to improve financial integration in the Eurozone and break the 'vicious' link between banks and their sovereigns. Nearly two years after this commitment was made, a single supervisory and a single resolution regime in the Eurozone are on the verge of becoming operational. Insights from the recently agreed Regulations and the preparatory process for the Single Supervisory Mechanism (SSM) enable banks to begin connecting the pieces of the Banking Union together.

The third in the series of papers on the SSM produced by the EMEA Centre for Regulatory Strategy provides a view on three questions we believe Eurozone banks should now consider without delay:

1. how are their regulatory relationships going to change?
2. how will the supervisory approach alter and what effects will this have?
3. what are the implications of the new resolution process?

Any bank that does not engage with these issues proactively is creating unnecessary risk for itself.

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