It is based on the idea of harmonised regulatory requirements, such as capital adequacy rules for banks and supervisory practices. Single Supervisory Mechanism (SSM) One of the main pillars of the Banking Union is the Single Supervisory Mechanism (SSM). It ensures consistent, non-biased supervision in all Member States.
This applies, in particular, to an economy like Germany’s, with its large number of small and medium-sized enterprises, or SMEs, that often produce niche products – otherwise known as “hidden champions”. Capital market financing allows firms to broaden their funding base. Euro-area enterprises are increasingly turning to the capital markets for funding.