For a substantial proportion of the foreign-owned banks operating in the Western Balkans, the ECB will become the home supervisor. In addition to enhancing financial stability in the euro area, and thus the home region of parent banks with subsidiaries in the Western Balkans, the SSM has the potential to facilitate home-host country cooperation in banking supervision.
Host supervisors in the region will have only one counterpart as home supervisor for a large part of their banking sector, instead of several, as is currently the case. In order to reap the benefits of this simplification, appropriate mechanisms for cooperation between the SSM and local authorities will need to be developed.