72% of our business is conducted via direct (and, of course, secured) loans to banks, a type of lending unknown to the Fed. For this kind of monetary policy, information on the financial soundness of our monetary policy counterparties is vital. 2  BIS central bankers’ speeches  The creation of the SSM represents an important complement to monetary policy.
A wellestablished European supervisory body that is capable of acting can recognise emerging internal risks in banks and strengthen their resilience and risk-bearing capacity. In addition, in the event of a crisis the ECB will be able to resort to the sound judgement of the SSM. This is especially true for the emergency liquidity assistance, which the national central banks are responsible for granting.