By Raphaël MORENON
5 May 2025
The European Banking Union, conceived in response to the financial turmoil of 2007-2008 and the sovereign debt crisis that followed, represents a major step forward in financial integration within the European Union. At the heart of this union is the Single Supervisory Mechanism (SSM), an integrated system for prudential supervision of banks. Its main objective is to guarantee the safety and soundness of the European banking sector, strengthen financial stability and promote consistent, high-quality supervision across the participating Member States. Understanding the workings of the ESM, its founding principles and its scope of action is essential for credit institutions operating in the eurozone and beyond. This article details these fundamental aspects. For an overview of the Single Supervisory Mechanism, additional information is available. The SSM: a pillar of the European Banking Union The Banking Union is built around...
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