As European supervisor it has no incentives related to national champions and its mandate is fully aligned with its European financial stability objective. The fact that the new European supervisor is not only legally independent but also independent of any single government or national financial system facilitates the pursuit of its objective. Second, the SSM can increase confidence among supervisors.
During the crisis, some supervisors, motivated by uncertainty, engaged in defensive actions such as national ringfencing of liquidity and national asset-liability matching. This may have been rational given their mandates, but it reinforced fragmentation. Under the SSM, all supervisors will have the same rules, standards and decision-making procedures.