ECB to Determine SSM “Significant” Banks by September

On 25 April 2014, the European Central Bank (ECB) published a press release and framework regulation detailing the way in which it will coordinate with national competent authorities (NCAs) in administering its obligations under the Single Supervisory Mechanism (SSM).

The SSM Regulation bestows supervisory powers over “significant” Eurozone banks on the ECB.  The assessment of whether or not a bank is “significant” will be based on:

• Size – the presumption being that any bank which fulfils any of the following criteria will be regarded as significant:
  • the total value of its assets exceeds EUR 30 billion; or
  • its total assets represent over 20% of the GDP of the relevant participating Member State (unless the value of those assets is below EUR 5 billion); or
  • both the bank’s NCA and the ECB confirm that the bank is to be regarded as “significant”;
• Importance for the economy of the EU or any Member State participating in the SSM; and
• Significance of cross-border activities.

Any bank which has received public financial assistance shall be regarded as “significant” as are the three most significant banks in each of the participating Member States.  The assessment as to whether or not a bank is “significant” should not be conducted more often than annually.

In its press release, the ECB confirmed that the first list of “significant” banks will be published in September 2014.

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