Abstract
The Single Supervisory Mechanism is an evolutionary reform for the supervision of credit institutions in Europe. It establishes a centralized supervision for credit institutions under the mandate of the European Central Bank (ECB). The founding Regulation, adopted in October 2013, provides for new and extensive tasks for the ECB and powers of supervision over credit institutions established participating Member States. While many challenges are open to debate, this paper contends that the SSM will provide the essential tools to shape a new Stability Union where institutionalization, centralization, integration, and top-down supervision take place. However, it is still essential that the ECB exercises its mandate correctly and is not reluctant as to the exercise of its powers. This article will examine some critical SSM regulatory features. These suggest that the SSM will be an essential structure to create a new Stability Union. In particular, the use of the enabling clause (Article 127(6) TFEU), allocation of responsibilities between the ECB and national authorities, and the emerging role of euro area law are key elements showing that Europe is converging towards a new model of European financial stability.
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