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. The banking union of the european union is the transfer of responsibility for banking policy from the national to the eu level in several countries of the european union initiated in 2012 as a response to the eurozone crisis. What is the banking union the banking union ensures that eu banks are stronger and better supervised a rulebook for all financial actors in the eu in response to the recent financial crisis the european commission pursued a number of initiatives to create a safer financial sector for the single market. The banking union bu is an essential complement to the economic and monetary union emu and the internal market which aligns responsibility for supervision resolution and funding at eu level and forces banks across the euro area to abide by the same rules in particular these rules ensure that banks take measured risks and that a bank that errs pays for its losses and faces the possibility of closure while minimising the cost to the taxpayer