criteria for assessing the suitability of candidates are implemented and interpreted differently across the various euro area countries. another source of regulatory fragmentation is the supervisory powers under national law that are not explicitly mentioned in crd iv. this concerns, for instance, major transactions which can be very relevant for the risk profile of a bank : for example, a bank acquiring a non - bank, or mergers and de - mergers involving a bank or transfers of assets. in some member states, these transactions need to be approved by the competent authority ( and rightly so ), in others they do not. and such regulatory fragmentation is not just a legacy we inherited from former times. even today, there are cases where fragmentation is actually being increased. in some countries, national legislators are converting non - binding supervisory practices into binding legal acts, thereby making it harder for the ecb to harmonise these practices. a recent example is the german law on bank resolution. this law delegates to the ministry of finance the power to issue regulations in areas such as internal governance and risk management. consequences of an imbalance between supervisory and regulatory harmonisation the regulatory landscape in europe is still fragmented. and from my point of view, many variations in national legislation can no longer be justified now that we have european banking supervision. imagine being a referee in a football match ; your main task is to administer the rules of the game. but what if the individual players adhere to different rules? in such a game, you as the referee would be forced to apply different rules depending on the player in question. you would have to judge similar situations in a dissimilar way – a foul by one player might warrant a penalty kick ; a foul by another player might not. in a sense, the ssm is that referee. article 1 of the ssm regulation requires the ecb to carry out prudential supervision “ with full regard and duty of care for the unity and integrity of the internal market ”. the article also refers to the “ equal treatment of credit institutions with a view to preventing regulatory arbitrage ”. a fragmented regulatory framework makes it difficult for the ecb to meet these requirements. in extreme cases, we are faced with 19 different legislations. and in many cases, we indeed have to judge similar situations in a dissimilar way. taking decisions under such bis central bankers ’ speeches circumstances is complicated and time - consuming. it requires substantial resources and is at odds with the idea of having a single european supervisor and a

establish a harmonised, risk - orientated and proportionate supervisory approach. at the same time, it contributes to the single market by levelling the supervisory playing field for all banks, while acknowledging the boundaries of national law. nevertheless, banking supervision is just one side of the coin ; the other is banking regulation. a truly single supervisor requires a truly unified regulatory framework. banking supervision can only be as harmonised as the rules and regulations that govern it. and against that backdrop, the regulatory playing field in europe is not as level as it should be. out of kilter – supervisory and regulatory harmonisation in europe now you may ask : “ hasn ’ t much been done already to harmonise the regulatory framework? ” and the answer, most certainly, is “ yes ”. much has indeed been done to harmonise regulation, both in europe and worldwide. just think of basel iii and the single european bis central bankers ’ speeches rulebook. particularly in europe, the european commission and the european banking authority ( eba ) have also contributed to a harmonised regulatory framework by adopting regulatory technical standards and by issuing guidelines and opinions. however, these attempts have not been sufficient to fully erase national differences. take the capital requirements directive ( crd iv ) for example. as this is a directive, member states are free to choose the form and method of implementation. consequently, not all member states opted for a word - for - word transposition of the relevant norms. several provisions of crd iv have been transposed differently across the euro area. this is certainly not a problem in itself as long as the differences are rooted in country - specific risks. but then there are many unjustified differences. let me give you an example : as you know, members of banks ’ management bodies have to fulfil “ fit and proper ” requirements. and here, we see very diverse rules across europe. in some countries, for instance, the supervisor assesses not only appointments of members of management bodies, but also appointments of “ key function holders ”. as regards the fit and proper assessment itself, there are further differences : some national authorities make use of questionnaires to be answered by the candidates, others do not. some national authorities conduct face - to - face interviews with new members of the board, others do not. in some countries, there are timelines for conducting the fit and proper assessment with specific, rather short deadlines, whereas in others there are no such timelines. even the