- Deposit insurance schemes — Bank supervision — Eurozone — Monetary union — European Central Bank
This chapter states that the creation of the banking union is one of the most prominent decisions in the field of financial regulation and constituted the basis for the renewed confidence in the European banking system after the 2007–2008 financial crises. By centralizing the supervision of the largest banking groups and harmonizing their supervisory regime, the Single Supervisory Mechanism (SSM) strengthened the effectiveness and the coherence of banking supervision, in the euro area, starting in 2014. Also, in 2014, the Single Resolution Mechanism became operational. The third pillar of the banking union is the European Deposit Insurance Scheme which will offer, along with the national deposit guarantee schemes and the resolution fund, an effective protection to bank creditors. Decision-making and supervision is centralized at the European Central Bank, although for the less significant banks the national authorities excise the first line of supervision. Special attention goes to the governance of the SSM within the European Central Bank, including independence and accountability.
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