What is the banking union the banking union ensures that eu banks are stronger and better supervised single supervisory mechanism the ssm gives the european central bank certain supervisory tasks over the eu financial system single resolution mechanism the single resolution mechanism srm is a central institution for bank resolution in the eu european deposit insurance scheme a . The banking union was created as a response to the financial crisis and currently has two elements the single supervisory mechanism ssm and the single resolution mechanism srm the ssm supervises the largest and most important banks in the euro area directly at european level while the purpose of the srm is to resolve failing banks in an orderly manner with minimal costs for taxpayers . The european central bank ecb is the central bank of the 19 european union countries which have adopted the euro our main task is to maintain price stability in the euro area and so preserve the purchasing power of the single currency