’ speeches absence of the srm, the ecb would have to hand problem banks back to national authorities that could also create conflicts of interest as national authorities could disagree with the measures taken on the supervisory side and deviate from a desired course when exercising resolution. the srm should have the same institutional and geographical scope as the ssm. ideally, and in the longer run, there should be the single resolution authority, which would be at the centre of the srm, govern the resolution of banks and coordinate the application of resolution tools. it should have a comprehensive set of enforceable tools, powers and authority to resolve all banks in the ssm. in particular it would ensure that failing banks are resolved swiftly, through impartial decision - making focused on the european dimension. the timely resolution of banks should avoid the cascading of problems from one bank to other banks, thereby affecting european financial stability. in my view, the banking union can be established without simultaneous creation of the pan - european deposit guarantee scheme ( dgs ). harmonisation of national dgs and their use could already be sufficient step forward, including the ex ante collection of funds from banks into the deposit guarantee funds. key features of the planned supervisory mechanism slide : timeline for the establishment of the ssm if all goes well, the european parliament should vote on 7 july and the ssm regulation could enter into force in the beginning of august this year – meaning that the actual operation of the ssm could start in august 2014, and then the ecb could assume its direct supervisory duties. the ssm will operate as a system, catering for all expertise of national supervisors and at the same time possessing a strong decision - making centre. appropriate decentralisation procedures are being planned, while preserving the unity of the supervisory system and avoiding duplication. the ssm, with the ecb at its centre, is entrusted with an extensive set of micro - and macro - prudential powers, covering all key tasks relating to the prudential supervision of credit institutions. this broad array of tasks and powers is crucial, as it is the foundation for the ssm to effectively supervise banks. the ssm also possesses early intervention powers as they are foreseen in the draft brr. these early intervention powers are significant relating the governance and scope of activities of institutions that start to have serious problems that can lead them to a point of non - viability. to ensure a strong centre, the ecb ’ s overall responsibility

from finland and estonia will still join supervisory cooperation on their behalf ; which is important also to maintain full picture of financial stability in their respective countries. should differences in opinion emerge ; the eba will mediate between the home authority and the ecb. the picture would become different, should sweden and denmark decide to join the ssm. it would simplify the supervisory structure if all our nordic authorities would operate under the ssm roof. the ssm also has powers 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. macroprudential instruments could also be applied to the euro - area financial system as a whole, in addition to individual countries. the crisis has shown that supervising the micro - prudential risks at individual banks separately is not sufficient and that macro - and micro - risks can actually be mutually reinforcing. there has to be very close cooperation between the macroand micro - prudential functions. the shared competence is important for two reasons. first, the system needs to be established in a way that creates incentives for action, ie the pre - crises prevailed national inaction bias needs to be broken. second, the credit cycles differ nationally and the associated potential problems need to be mitigated through nationally diverging ways. this is a different approach compared with monetary policy in monetary union or banking supervision, in which the aim is maximum harmonization of national practices. key milestones in the preparation of the ssm slide : key milestones in the preparation of the ssm the practical preparation of the ssm has been well underway since last autumn. in this summer the main elements of the supervisory model and the supervisory manual should be rather developed. the same goes for the ecb framework regulation, which is an own regulation by the ecb setting out the main responsibilities of the ecb and national authorities and the main requirements set for banks in the ssm. also during this summer the main features of the ssm risk assessment system ( ras ) should be available as well as the finalized list of significant banks entering into ssm direct supervision. bis central bankers ’ speeches during this autumn 2013 and spring 2014 the newly established ssm supervisory board first consults on and then adopts all the basic documents setting out the operation of the ssm, which would then start in the summer of 2014. i would like