The European Commission has published draft legislation and a blueprint for transferring significant European banking supervisory powers to the European Central Bank (ECB). The proposed Single Supervisory Mechanism (SSM) is due to take effect and shall be directly applicable in all Eurozone Member States from 1 January 2013, subject to a partial one year phasing-in period. By 1 January 2014, it is supposed to cover all credit institutions in the Eurozone.
The SSM is part of the package of measures comprising the establishment of a Banking Union in the EU. The Commission is also calling on the European Parliament and the Council to reach agreement by the end of 2012 on the capital and liquidity standards to be introduced by the new Capital Requirements Directive and accompanying Regulation (known as the CRD 4 package), the proposal for a Directive on Recovery and Resolution of Credit Institutions and Investment Firms and the proposal for a (recast) Directive on Deposit Guarantee Schemes.
The Commission's proposals are, however, controversial and it is difficult to predict when, and in what form, they will be implemented.
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