The financial crisis led to global regulatory reforms to strengthen the stability and resilience of the financial system. One of the things the reforms introduced was stricter requirements for banks to hold more and stronger capital as well as liquid assets.
From an institutional point of view, in the euro area, the Single Supervisory Mechanism ( SSM (Single Supervisory Mechanism)) has contributed to keeping the European banking system overall safe and sound and to bolstering financial stability. Thanks to ambitious supervisory action, euro area banks have made significant progress on cleaning up their balance sheets.