The First Pillar of the Banking Union: The Single Supervisory Mechanism

Abstract

Recent decades saw a significant consolidation and internationalisation of the banking sector at the European level. This resulted in profound changes in banks’ organisational, operational and distribution structure. The growth of cross-border and cross-sector intermediaries opened a gap between international markets and national rules and structures for banking supervision. This had serious consequences for the efficiency and effectiveness of controls. The situation became even more critical in situations in which intermediaries were operating in a group where entities had independent legal status in the various countries of settlement.