The Permanent Representatives Committee of the Council approved a compromise agreed with the European Parliament on the establishment of a single supervisory mechanism (SSM) for the oversight of credit institutions. Once formally approved by both institutions, the Council and the Parliament, the European Central Bank will assume its supervisory tasks within the SSM either on 1 March 2014 or 12 months after entry into force of the legislation.

The deal on the establishment of a single supervisory mechanism (SSM) for the oversight of credit institutions, agreed on 19 March by the Council and the European Parliament negotiators, was approved by the Permanent Representatives Committee. The SSM will be composed of the European Central Bank (ECB) and the supervisory authorities in the member states.

Once formally approved, the ECB will have direct oversight of eurozone banks, although in a differentiated way and in close cooperation with national supervisory authorities. Non-eurozone member states wishing to participate in the SSM will be able to do so by entering into close cooperation arrangements.

According to the Council, the agreement reached with the Parliament confirms the Council's position on the balance of rights and obligations between participating and non-participating member states, and between euro area and non-euro area participants. It also strengthens accountability, in terms of transparency and right of inquiry, and gives the Parliament a greater role in the appointment of the chair and vice chair of the supervisory board.