The EU Contact Committee draws attention to gaps in banking supervision

The Contact Committee of the Supreme Audit Institutions of the European Union has issued a statement on deficiencies in the accountability and audit arrangements of the single supervisory mechanism for banks in the euro area.

The establishment of the single supervisory mechanism in 2014 brought fundamental changes in EU banking supervision. Almost 130 significant banks came under the direct supervision of the European Central Bank (ECB), representing 80 per cent of the total asset value of banks in the euro area. At the same time, several thousand less significant banks remain under direct national supervision, although the ECB has overall responsibility for their supervision.

The supreme audit institutions (SAIs) of the euro area countries that previously audited the supervision of all banks have no longer audited significant banks after the changes were introduced. However, the current audit mandate of the European Court of Auditors (ECA) with respect to the ECB is not comparable to the mandates lost by national SAIs. This means that, as a whole, banking supervision is now audited in a more limited scale than before the introduction of the single supervisory mechanism.

In view of the need to eliminate gaps in in the audit arrangements, the Contact Committee calls on national governments and parliaments, as well as the European Parliament, the European Council and the European Commission to

  • align the audit mandate of the ECA in respect of the supervisory mechanism of the ECB with its mandate regarding the other EU institutions.

  • ensure that the national SAIs in the euro area have access to all information that they consider relevant.

  • expand the audit mandates of the national SAIs in the euro area with respect to less significant banks if this is necessary and feasible.

Read more: EU Contact Committee statement