The creation of the SSM is an opportunity for Europe to rethink the links between banking supervision and monetary policy in a way that can strengthen both functions and learn the lessons of past banking crises, such as avoiding “zombie banks” infused with central bank money or the evergreening of non-performing loans. The SSM does not need to be limited to the euro area.
As the cornerstone of a financial market union, it is necessary for the euro area, but it is desirable for the EU as a whole. The participation of additional Member States is welcome and would strengthen the Single Market. These countries have raised legitimate concerns about a fair involvement in the decision-making of the SSM.