Introduction
As of today, Tuesday 4 November 2014, the Single Supervisory Mechanism (the "SSM") will be in effect. From now on, all banks established in a Euro Member State will be subject to prudential supervision by the European Central Bank (the "ECB"). The SSM is applicable to all banks − approximately 4,900 − that are located in participating Member States.
The ECB will exercise direct prudential supervision with respect to all 'significant' Dutch banks. The ECB will − via the Dutch Central Bank ("DNB") − indirectly also exercise a fair amount of influence on the other non-significant Dutch banks. The SSM is primarily based on the SSM Regulation (click here) and the Framework Regulation (click here).
In this newsletter, we will discuss the practical consequences of the SSM. We will also set out the mechanics of the SSM.
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