Principles

1. Principles • For the SSM to work, a union body must be vested with ultimate supervisory authority over all EU banks • ECB cannot be this body • unless all MS join the Euro • Ultimate solution = Use 352+114 TFEU to create a body (EBA or a separate entity) that has these powers • Immediate solution = reinforce EBA to ensure that : • ECB is treated as ordinary supervisor • ECB and other NSAs are equally subject to final say by EBA • EBA can address binding instructions equally to all NSAs and ECB • Adapt decision making in EBA to prevent the ECB mechanism • Systematically dominating non-ECB MS • Diminishing rights of “opt-ins” • Enhance EBA’s powers to enforce compliance with information requests and other decisions are reinforced (reflecting EP position from 2010)

2. Proposals • Enhanced powers of EBA • Full investigatory powers over institutions & supervisors • Issuing Single Supervisory Handbook (Enria) • Direct intervention in case of non-compliance • Strong rights in stress test operations • + EP position on EBA 2009 • Binding instructions • ECB (non-)action can be corrected by binding EBA decision (no independence for supervisory tasks) • Just as in the case of National Supervisory Auths. (NSA) • Special Panel for ECB competent authorities • Possibility of challenging (via EBA) ECB decision affecting an “opt-in” • Means that ECB decision (based on power of Gov. Council with no “opt-ins”) can be overruled by EBA decision (proposed by panel including “opt-ins”) • Changed EBA voting system for Binding Mediation • “3+3” only where a dispute is between ECB and non-ECB • Simple majority otherwise • Binding rules for EBA to safeguard diversity of the European banking system