Consequently, one of the pillars the banking union rests upon is a Single Supervisory Mechanism – that is European bank supervision for the largest banks. Centralising supervisory powers in such a way can foster a comprehensive and unbiased view upon banks. It also enables policy action that is not held hostage by national interests.
Thus, it will contribute to more effective supervision and better cross-border cooperation and coordination. However, the banking union does not rest on one pillar alone. A second pillar is necessary to keep everything in balance. This second pillar is the Single Resolution Mechanism. European bank supervision requires European bank resolution – otherwise there would be an imbalance between liability and control.