The SSM supervisory model

The Single Supervisory Mechanism (SSM) consists of the European Central Bank (ECB) and the national competent authorities (NCAs) of participating Member States, and combines their strengths, experience and expertise. The ECB is responsible for the effective and consistent functioning of the SSM and exercises oversight over the functioning of the system. To ensure effective supervision, credit institutions are categorised as “significant” and “less significant.”

The ECB directly supervises the significant institutions through the Joint Supervisory Teams (JSTs), which are responsible for the day-to-day supervision of these institutions. These teams comprise staff from the ECB and the NCAs, and their work is coordinated by an ECB staff member, assisted by one or more NCA sub-coordinators. Among other duties, these teams are responsible for the ongoing assessment of institutions' risk profiles, solvency and liquidity, and prepare the draft decisions to be presented to the Supervisory Board.

In the case of significant institutions, the NCAs, including the Banco de España, must assist the ECB, contributing their experience and most of the supervisors making up the JSTs. Also, among other tasks, they provide support for on-site inspections (to be carried out by non-JST teams), gather and transmit any information required, participate in the preparation of supervisory decisions, and collaborate on sanctioning procedures.

Less significant institutions are supervised directly by the NCAs, while the ECB supervises them indirectly. In these cases, the ECB, which has ultimate responsibility for the functioning of the SSM, may issue guidelines to ensure consistent supervision in participating countries, request additional information, or even take over the direct supervision of an institution if it considers it necessary.