10 years of the Single Supervisory Mechanism (SSM): banks draw a sobering interim conclusion

The Single Supervisory Mechanism has been in place for ten years in 2024.

The Single Supervisory Mechanism has been in place for ten years in 2024.

  • The SSM was created in 2014 to standardize and strengthen Europe's banking supervision.
  • To mark its tenth anniversary, the banking association, KPMG and the Center for Financial Studies at Goethe University FFM surveyed 31 European financial institutions.
  • High costs and declining competitiveness are criticized.

Berlin, 27th of November 2024

The Single Supervisory Mechanism will be ten years old in 2024. To mark this occasion, the Association of German Banks, together with the consulting firm KPMG and the Center for Financial Studies at Goethe University Frankfurt am Main, conducted a study of 31 European banks under SSM supervision.

According to the study, the participating institutions agree that the quality of banking supervision has improved as a result of the SSM. However, more than half say that supervision is too complex. 81 percent consider the numerous, sometimes duplicate, queries by the SSM to be incomprehensible. And they are a burden for the institutions: According to the respondents, the extensive queries and requirements are not only associated with costs, but are also detrimental to competitiveness.

The Center for Financial Studies, KPMG and the Bankers Association derive three recommendations from their findings:

  • In addition to safeguarding financial stability, the SSM should keep in mind that competitive banks are needed for long-term economic growth in the EU.
  • Balanced supervision should also take into account that banks differ in terms of their size and business models, among other things.
  • The SSM and banks should strengthen their understanding of each other through an open exchange.

"The SSM has strengthened and secured financial stability in the eurozone and the banking market. Now it is time for the supervisory authority to focus even more on the competitiveness of banks. This includes less bureaucracy and avoiding redundant data queries," says Heiner Herkenhoff, Managing Director of the German Bankers Association.

Professor Dr. Volker Brühl, Managing Director of the Center for Financial Studies at Goethe University: "The SSM has led to an improvement and standardization of banking supervision in Europe. On the other hand, the scope and level of detail of supervision has increased enormously in recent years, with corresponding effects on data requirements and regulatory costs. The ECB should reduce the enormous complexity of the SSM. This could increase the efficiency of supervision and reduce the burden on institutions."

Download

You can download the publication on this page: SSM 10th Anniversary Report and Recommendations

Press contact

Clemens Reisbeck

Deputy Head Corporate Communications
KPMG AG Wirtschaftsprüfungsgesellschaft

T +49 89 9282 1722
creisbeck@kpmg.com