Preparations for the Single Supervisory Mechanism (SSM), composed of the ECB and the national authorities, are proceeding apace. This constitutes a complex feat of institutional engineering, at least as demanding as that preceding the introduction of the single currency.
Building on the accumulated technical expertise of the national authorities, the SSM must represent a supranational vision based on best practices in supervisory methods, analytical models and banking risk assessment. The transition to the single supervisor will enable easier comparison of the intermediaries and systems of the various countries, helping to combat the tendency to segmentation of financial markets along national lines.