ECB Speech on SSM Comprehensive Assessment and Future Supervision of Banks


On November 20, the European Central Bank (ECB) published a speech given on November 18 by Yves Mersch, ECB executive board member, on the ECB’s perspective on current issues relating to the European banking union.

Among other things, Mr Mersch:

  • Considers the comprehensive assessment of banks in the single supervisory mechanism (SSM) that will be  subject to direct ECB supervision;
  • states that the stress test, which forms part of the comprehensive assessment, will be conducted by the ECB over  a period of three years, and that the ECB will use a baseline scenario and one stress scenario;
  • comments that the ECB is currently discussing internally the question of how exposure to government bonds should be valued; and
  • summarizes the ECB’s proposed supervisory approach to banks that will be subject to direct supervision (that is, banks deemed to be significant under the SSM Regulation (Regulation 1024/2013)) and to the other banks in the SSM.

The UK Prime Minister has stated that the UK will not participate in the SSM. Speech.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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