Report of the Task Force on European Banking Union on prudential supervision of medium-sized and small (“less significant”) institutions in the European Union after the introduction of the Single Supervisory Mechanism
Report ID: 259
As from 2008, Europe was hit by a financial crisis and a subsequent sovereign debt crisis. Many governments supported failing financial institutions with public funds amounting to hundreds of billions of euros. In response, the countries of the euro area introduced the European Banking Union, including a Single Supervisory Mechanism. In this Mechanism, the European Central Bank is directly responsible for prudential supervision of all ‘Significant Institutions’. National Competent Authorities are directly responsible for supervising the ‘Less Significant Institutions’, based on guidance of the European Central Bank.
The Supreme Audit Institutions of Austria, Cyprus, Finland, Germany and the Netherlands carried out a parallel audit to examine banking supervision at national level. The objectives of the parallel audit were:
1) to gain insight into differences among EU Member States in the way supervisors have set up and carry out prudential supervision for LSIs, and
2) to collect evidence about possible ‘audit gaps’ that may have emerged as a result of the introduction of the Single Supervisory Mechanism.
One of the findings was that a comprehensive audit mandate assessing the supervisory review and evaluation process of banking supervision is no guaranteed in the Single Supervisory Mechanism(SSM) and that before November 2014, National Supreme Audit Institutions audit scope went far beyond what the ECA is able to exercise today vis-à-vis the ECB.
EUROSAI website: https://www.eurosai.org/en/databases/audits/Report-of-the-Task-Force-on-European-Banking-Union-on-prudential-supervision-of-medium-sized-and-small-less-significant-institutions-in-the-European-Union-after-the-introduction-of-the-Single-Supervisory-Mechanism/