The specificity of the ECB’s approach must be seen against the background of the bank-based financing structure of the euro area economy which I mentioned earlier – in contrast to the more market-based financing in the United States for instance. It must also be seen against the specific institutional environment in which the ECB operates – characterised by a multi-country context.
In addition, under the Gramm-Leach-Bliley Act of 1999, the Federal Reserve’s consolidated supervision of bank holding companies was both narrowly focused on the safety and soundness of their bank subsidiaries and heavily reliant on functional supervisors of the bank and regulated nonbank subsidiaries of these companies; in turn, the functional supervisors themselves were statutorily focused only on the safety and soundness of the specific entities they regulated.