The role of Joint Supervisory Teams in Single Supervisory Mechanism Approach

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Marta Božina Beroš

Abstract

One of the Banking Union's goals is undoubtedly to facilitate the development of a common supervisory culture, or in other words, the harmonization of supervisory practices, standards, and methodologies across Member States participating in this integration framework. And while common rules and regulations help to ensure regulatory and procedural consistency, the development of the common supervisory culture largely depends on the genuine cooperation among supervisors. This cooperation takes place within Joint Supervisory Teams (JSTs), as main operative units of the Single Supervisory Mechanism (SSM) responsible for the continuous oversight of systemically important banks, on the basis of common supervisory standards and methodologies, which also bring together EU and local supervisory. Based on an interdisciplinary theoretical framework of (political) economy, with a particular focus on the principal-agent problem as well as the theory of (de)centralization of decision-making in the Economic and Monetary Union, and through a qualitative analysis of various primary and secondary sources, this paper provides one of the first comprehensive examinations of the JSTs in the domestic literature (also focusing on JSTs in close cooperation), emphasizing the importance of multilevel cooperation, and revealing the participative rather than centralizing, nature of the SSM.  The paper concludes that joint supervisory teams function as the executive arm of a holistic, comprehensive process of checking banks’ soundness and in-depth micro-prudential supervision within the Single Supervisory Mechanism, and are crucial to the creation and consolidation of the common supervisory culture in the Banking Union.

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How to Cite
Božina Beroš, Marta. 2022. “The Role of Joint Supervisory Teams in Single Supervisory Mechanism Approach”. Oeconomica Jadertina 12 (2):36-49. https://doi.org/10.15291/oec.3809.
Section
Review article

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