In the specific case of the euro area, something more than good policies was needed to overcome the exceptional crisis that was posing challenges to the very foundations of Economic and Monetary Union (EMU). The authorities have responded to the related challenges by significantly strengthening the institutional architecture of EMU.
In the field of banking, this has led to a decision on the establishment of a banking union. It will be centred around two main pillars, a Single Supervisory Mechanism (SSM) and a Single Resolution Mechanism (SRM). It will contribute to the stability of the euro area financial system, help to overcome financial fragmentation and, therefore, also facilitate the conduct of monetary policy.