seems to indicate that in the future we see an extension of the ssm further beyond the euro area. the special status of the non - euro area countries is taken into account in the decisionmaking mechanism. • non - euro area member states can participate through establishing a close cooperation agreement with the ecb. • by giving non - euro area member states full membership and voting rights in the supervisory board they are placed on an equal footing with the euro - area members. • if the governing council prevents the entry into force of a decision, which results in a modification of the decision, a non - euro area country may announce nonsatisfaction with such a decision. • if the governing council decision prevails, the non - euro area country can choose not to adopt the decision. for its part, the ecb could then consider breaking up the agreement of close cooperation. joint supervisory teams will be established. they will integrate the ecb and national competent authority staff into single supervisory units responsible for the conduct of the on - going supervisory activities, planning of on - site inspections and other supervisory work and for preparing supervisory decisions. • the teams will be established and led by the ecb. • there will be one team for each significant banking group, tailored to the needs of each banking group ( proportionality ). • the joint supervisory teams will provide a single interface for the supervised banks and a single entry point for applications e. g. concerning internal models to be approved by the supervisor. the crisis has shown that micro - prudential supervision at individual bank level is not sufficient, and that macro and micro risks can actually be mutually reinforcing. this calls for very close cooperation between the macro - and micro - prudential functions. the ssm has powers also in the macro - prudential area, which is a shared competence with national macro - prudential authorities. • the ecb will comment on national measures and has the possibility to tighten the national measures if they are deemed inadequate. bis central bankers ’ speeches • macro - prudential instruments could also be applied to the euro - area financial system as a whole. • the role of the eu macro - prudential supervisor, the european systemic risk board ( esrb ), is broader both geographically and functionally than the ssm. the esrb covers all eu member states and the whole financial system rather than only the banking sector. the practical preparation of the ssm has been well underway since autumn 2012.

• ‒ there is an “ uncertainty discount ” attached to ( almost ) all banks due to opacity of bank ’ s balance sheets creating some uncertainty as to the quality of the assets. the market ( currently ) assesses assets with some caution and is hence undervaluing many, if not most, banks to be on the safe side. ‒ the banking union and in particular its balance sheet assessment, provided that it is seen as credible, will increase transparency and thus reduce the uncertainty attached to the market value of banks. ‒ pricing will more correctly reflect the true value of the banks. the discount unfairly attached to good banks will be reduced, or even eliminated. the weak banks will, however, most probably see their share price drop even further. banks that are no longer deemed viable need to be restructured or wound down through orderly resolution processes. ‒ an unanswered question still is the potential impact on the required return on equity. while some studies suggest that owners could accept lower returns due to a safer and more stable business environment, there is no really clear evidence on that yet. the banking union will moreover reduce the impact of the financial position of the country in which the bank is headquartered on the market value of the bank. ‒ the size and significance of the cross - border banks will no longer be related to the size and fiscal strength of a single country but rather to a region that reflects its operations in a more appropriate way. in thinking about the effects of the banking union on individual countries and banks we should bear in mind that the banking union is built for the long term. • the current positions of strength or weakness of various countries and banks will not be permanent : “ the last will be first and the first will be last ”. we should bis central bankers ’ speeches therefore evaluate the banking union from a general, not particular or transitory perspective. • finally, the increased confidence in banks that fall under the ssm supervisory umbrella may open up wider cross - border business opportunities for banks and reignite the integration process of the european banking sector. customer perspective the ssm will also impact bank customers. • for retail customers and depositors especially, there can be some enhanced comfort through perceived high - quality supervision that can come to some benefit for ssm banks as e. g. attracting new customers is facilitated. this is particularly true for foreign subsidiaries, which may be perceived as less reliable than the well established banks. • again such matters can become particularly significant if the financial standing