The setting up of a banking union with the Single Supervisory Mechanism (SSM) and the single resolution mechanism (SRM) as core elements is therefore key and will enhance the quality of supervision and the credibility of the system and remove the misalignment between the institutional frameworks for monetary policy and financial stability.
Given the close economic and financial links between the euro area and south-eastern Europe, it goes without saying that progress in addressing the crisis in the euro area is in the interest of countries in this region. The SSM may bring particular benefits, as subsidiaries or branches of euro area banks are of systemic importance in the financial systems of many south-eastern European countries.