Conference Paper

One of the strategic directions is to establish a regulatory and institutional framework at the European level with the aim of protecting and ensuring financial stability through the effective and consistent application of a single and uniform rulebook. The single supervisory mechanism is designed for those countries within the Eurozone, but is also open to other EU countries. Closer coordination would ensure that responses to EU-wide economic problems are coordinated and therefore much more effective. The Single European Banking Supervision will have a statutory objective to promote the safety and soundness of the EU banking system. It is one of the measures to overcome the debt crisis in the Eurozone and a decision with far-reaching implications. In this paper we will elaborate the positive and the negative consequences from the single supervisory mechanism. Critics of this idea of the Single European Banking Supervision point out the existence of a reputational risk and a conflict of interests. Also, according to critics of the current approach to making and dealing with the crisis marked as “too little, too late” creates the perception that decision is more a sign of weakness rather than of having a clear vision and plan for the future of the European (Monetary) Union and to exit from the current crisis. Vision for the future of the EMU in the long run, undoubtedly lies in a deeper financial, fiscal, economic and political integration of the Eurozone.