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European banking supervision: compelling start, lingering challenges

Schoenmaker, Dirk, Véron, Nicolas, (2016), “European banking supervision: compelling start, lingering challenges”, Bruegel, 8 June

The new European banking supervision system is broadly effective and, in line with the claim often made by its leading officials, tough and fair, but there are significant areas for future improvement. European banking supervision (also known as the Single Supervisory Mechanism) is the first step in Europe’s banking union. Some 18 months after its official start on 4 November 2014, Bruegel has published what we believe is the first in-depth early assessment of how it works in practice (Schoenmaker & Véron, 2016). We go beyond the European  perspective, and look closely at  nine member states, with country-specific chapters written by recognised local experts. This two-level perspective is still necessary: banking supervision was almost entirely national until 2014, and national idiosyncrasies will continue to shape the system for a long time, both in terms of banking models and structures and in terms of perceptions and politics.

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