The impact of the European Banking Union’s Single Supervisory Mechanism on corporate governance practices in European banks

  • Received June 18, 2018;
    Accepted July 2, 2018;
    Published July 9, 2018
  • Author(s)
    Udo Braendle
    ORCID
  • DOI
    http://dx.doi.org/10.21511/bbs.13(2).2018.14
  • Article Info
    Volume 13 2018, Issue #2, pp. 164-177
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Weak corporate governance in financial institutions has been a contributing factor of the financial crisis. The topic has, therefore, become the key priorities of banking supervision, because one of the takeaways was that. The article gives an overview about the newly established European Banking Union and about its structure focusing on the first pillar, the Single Supervisory Mechanism (SSM). In a second step, the focus is laid on the recent regulatory changes regarding corporate governance, the related supervisory practice and implications for European banks. Overall, the conducted changes in the regulatory framework, especially regarding corporate governance, seem to meet the objective of ensuring safety and soundness of the European banking system. Room for improvement is found regarding proportionality and transparency of the supervisory practices as well as its influence on banks’ profitability.

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    • Figure 2. The structure of the European Banking Union
    • Figure 3. Stakeholders involved in fit and proper assessments
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    Acknowledgment
    This publication was supported by Deanship of Scientific Research, Prince Sattam Bin Abdulaziz University, Alkharj, Saudi Arabia.

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