ABSTRACT
This chapter is about the establishment of the Single Supervisory Mechanism, or SSM. If anything has become supranational in the context of Banking Union, this is it. The vision of a single bank supervisor with direct responsibility for all EU banks, coupled with powers to wind them down in an orderly fashion was never achieved, but more supranationalism was achieved in this area than in any other. Accordingly, proponents of neofunctionalism point to its establishment as proof that institutions followed functional necessity, allowing for the necessary political negotiations to reach the deal about how (Epstein & Rhodes 2016; Schimmelfennig 2016). They further maintain that the European Central Bank created facts that were very difficult for national governments, including Germany, to resist, with the consequence that the SSM has more direct power than the member states intended to provide in the first place. This shows that national preferences ultimately lost out to the functional need for a central bank for the euro area.
