In this article, I try to assess the likely impact of the Single Supervisory Mechanism (SSM) on cross-border banking in Europe. Firstly, I analyse the limits of the SSM, which is grounded on supervisory cooperation even though the ECB has powers of direction and substitution with respect to national supervisors. Indeed, the SSM represents a system of semi-strong centralisation, which may give rise to agency problems, particularly in the relationships with supervisors of non-euro area countries. Secondly, I examine the decoupling of supervision from regulation, which derives from the fact that the ECB lacks sufficient regulatory powers when acting as a supervisor of the Eurozone banking systems. The separation of regulation – which is harmonised at EU level – and supervision – which is centralised in the euro area – may create problems to the extent that the single supervisor cannot issue a prudential rulebook for the Eurozone but is subject to EU prudential regulation and national law provisions, often unduly limiting its supervisory discretion.
Professor Ferrarini holds a J. D. (University of Genoa), an LL.M. (Yale Law School) and a Dr. jur. (h.c., Ghent University).
He is a founder, director and fellow of the European Corporate Governance Institute (ECGI), Brussels.
He is chairman of EuroTLX (a multilateral trading facility) and a board member of Banca Passadore.
Professor Ferrarini was a member of the Board of Trustees, International Accounting Standards Committee (IASC), London and an independent director at some Italian blue-chip companies (Atlantia, Telecom Italia and TIM).
He was an advisor to the Draghi Commission on Financial Markets Law Reform, to Consob (the Italian Securities Commission) and to the Corporate Governance Committee of the Italian Stock Exchange.
He held Visiting Professorships at several universities in Europe (Bonn, Frankfurt, Ghent, Hamburg, LSE, UCL, Tilburg and Duisenberg) and the US (Columbia, NYU and Stanford), teaching courses on comparative corporate governance and financial regulation. He is author of many articles in the fields of financial law, corporate law and business law, and editor of several books, including the recent Financial Regulation and Supervision: A Post-crisis Analysis (with E. Wymeersch and K. Hopt).