The Single Supervisory Mechanism (SSM) is a system of banking supervision composed of the European Central Bank (ECB) and the national competent authorities of participating Member States.
Within the SSM, the ECB will be responsible for the direct supervision of significant supervised entities, whereas national competent authorities of participating Member States will be responsible for the direct supervision of less significant supervised entities. The ECB will assume its SSM related tasks from 4 November 2014.
The ECB will also be responsible for the effective and consistent functioning of the SSM. The ECB will be able to issue general instructions to the national competent authorities of participating Member States with regard to the supervision of less significant supervised entities and will retain investigatory powers over all supervised entities.
Currently supervisory financial reporting is only mandatory for institutions applying International Financial Reporting Standards at the consolidated level. The draft Regulation of the ECB on reporting of supervisory financial information (the draft ECB Regulation) aims to extend the regular reporting of supervisory financial information to the consolidated reports of banks under national accounting frameworks, as well as to reports at the solo level. This extension will cover all supervised entities but in accordance with the proportionality principle, less significant supervised entities will be subject to reduced reporting requirements and be given more time for implementation.
The ECB has now published a consultation paper which is intended to assist interested stakeholders in understanding and assessing the draft ECB Regulation. The consultation paper consists of three parts:
- rationale for, and scope of, an ECB Regulation on reporting of supervisory financial information;
- content of the draft ECB Regulation; and
- the draft ECB Regulation.
The deadline for comments on the consultation paper is 4 December 2014. The ECB will also hold an open hearing on 13 November 2014.