It is made up of the ECB and the national supervisors of the 19 euro area countries. The ECB directly supervises the largest banks in the euro area. Smaller banks are still supervised at the national level, but in close cooperation with the ECB. Our job is to contribute to a healthy and resilient banking system.
We make sure each bank respects the rules it is subject to and is supervised according to the same approach. This creates a level-playing field for all banks across the euro area and avoids supervisory arbitrage and national bias. The next step was to create a European system to deal with bank failures: the Single Resolution Mechanism. This step represented a larger paradigm shift.