Whereas only the most significant banks will fall under the direct supervision of the ECB, less significant banks, while remaining under national supervision, will not be excluded from the ECB’s supervisory reach. 1. National authorities will have to abide by ECB regulations, guidelines and general instructions and be subject to the ECB’s broad oversight mandate over the functioning of the SSM. 2.
Hence, the governance structures and practices in the banks should prioritise depositors' interest and maintaining their trust. 5. Effective governance requires a competent and independent Board effectively overseeing the management by asking the right questions, formulating appropriate strategies keeping in mind the risk appetite as well as establishing proper policies and procedures. 6.