Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278205 
Year of Publication: 
2022
Series/Report no.: 
Working Paper No. 244
Publisher: 
Oesterreichische Nationalbank (OeNB), Vienna
Abstract: 
Under the Single Supervisory Mechanism (SSM) introduced in 2014, the European Central Bank directly supervises significant euro area banks, which hold about 82% of total banking assets. We find that this important supervisory change has positive effects on the return on assets and the return on risk-weighted assets of SSM banks without increasing the risk weights used to calculate regulatory capital. Our findings indicate that these effects result from better risk management and increased confidence in the soundness of SSM banks. Our results therefore suggest that the SSM has strengthened the resilience of the euro area banking system.
Subjects: 
ECB Single Supervisory Mechanism
bank profitability
capital requirements
risk-weighted assets
Document Type: 
Working Paper

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