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Single Supervisory Mechanism (SSM)
Article 16

Article 16 — Supervisory powers

  1. For the purpose of carrying out its tasks referred to in Article 4(1) and without prejudice to other powers conferred on the ECB, the ECB shall have the powers set out in paragraph 2 of this Article to require any credit institution, financial holding company or mixed financial holding company in participating Member States to take the necessary measures at an early stage to address relevant problems in any of the following circumstances:
    1. the credit institution does not meet the requirements of the acts referred to in the first subparagraph of Article 4(3);
    2. the ECB has evidence that the credit institution is likely to breach the requirements of the acts referred to in the first subparagraph of Article 4(3) within the next 12 months;
    3. based on a determination, in the framework of a supervisory review in accordance with point (f) of Article 4(1), that the arrangements, strategies, processes and mechanisms implemented by the credit institution and the own funds and liquidity held by it do not ensure a sound management and coverage of its risks.
  2. For the purposes of Article 9(1), the ECB shall have, in particular, the following powers:
    1. to require institutions to hold own funds in excess of the capital requirements laid down in the acts referred to in the first subparagraph of Article 4(3) related to elements of risks and risks not covered by the relevant Union acts;
    2. to require the reinforcement of the arrangements, processes, mechanisms and strategies;
    3. to require institutions to present a plan to restore compliance with supervisory requirements pursuant to the acts referred to in the first subparagraph of Article 4(3) and set a deadline for its implementation, including improvements to that plan regarding scope and deadline;
    4. to require institutions to apply a specific provisioning policy or treatment of assets in terms of own funds requirements;
    5. to restrict or limit the business, operations or network of institutions or to request the divestment of activities that pose excessive risks to the soundness of an institution;
    6. to require the reduction of the risk inherent in the activities, products and systems of institutions;
    7. to require institutions to limit variable remuneration as a percentage of net revenues when it is inconsistent with the maintenance of a sound capital base;
    8. to require institutions to use net profits to strengthen own funds;
    9. to restrict or prohibit distributions by the institution to shareholders, members or holders of Additional Tier 1 instruments where the prohibition does not constitute an event of default of the institution;
    10. to impose additional or more frequent reporting requirements, including reporting on capital and liquidity positions;
    11. to impose specific liquidity requirements, including restrictions on maturity mismatches between assets and liabilities;
    12. to require additional disclosures;
    13. to remove at any time members from the management body of credit institutions who do not fulfil the requirements set out in the acts referred to in the first subparagraph of Article 4(3).