During the negotiations Italy offered a view consistent with the very motives behind the BU project: the SSM was supposed to be the prerequisite of a common public backstop for distressed banks, with the aims of removing the “tail risk” from the EZ banking system and cutting the link between sovereigns and banks; any moral hazard could be prevented by an effective common supervision.
This view, also shared by several other countries, was eventually rejected by the majority. Meanwhile the SSM was created. The new system has been in place since last November. It is centered on the European Central Bank (ECB) and comprises all the national competent authorities (NCAs) of the euro-area countries.