The European Central Bank (ECB) has published a Regulation of 16 April 2014 which establishes the framework for cooperation within the single supervisory mechanism (SSM) between itself and national competent authorities (NCAs) and with national designated authorities (the Regulation).
Within the SSM, the ECB and NCA supervisory responsibilities are allocated on the basis of the significance of the entities that fall under the scope of the SSM. The Regulation sets out, in particular, the specific methodology for the assessment of such significance, as required by article 6(7) of the Regulation establishing the SSM (the SSM Regulation). The ECB has direct supervisory competence in respect of credit institutions, financial holding companies, mixed financial holding companies established in participating Member States, and branches in participating Member States of credit institutions established in non-participating Member States that are significant. The NCAs are responsible for directly supervising the entities that are less significant, without prejudice to the ECB’s power to decide in specific cases to directly supervise such entities where this is necessary for the consistent application of supervisory standards.
Also article 6(7) of the SSM Regulation states that the ECB must, in consultation with the NCAs and on the basis of a proposal from the supervisory board, adopt and make public a framework to organise the practical arrangements for cooperation between the ECB and the NCAs within the SSM. The Regulation develops and specifies the cooperation procedures established in the SSM Regulation between the ECB and the NCAs within the SSM as well as, where appropriate, with the national designated authorities.
