OREANDA-NEWS. March 18, 2015. The head of Europe's new single banking authority said Tuesday that while much progress has been made in harmonising eurozone banking rules, there was still room for improvement.

The Single Supervisory Mechanism, or SSM, set up within the European Central Bank to oversee the eurozone's banking system, was helping to implement a single banking rulebook, its chief Daniele Nouy told a financial congress.

That was "a first major step towards harmonisation. But ... insufficiently harmonised regulation stands in our way," Nouy said.

"To deliver consistent supervision and a level playing field, we need fully harmonised regulation," she insisted.

The SSM, which started work late last year, had "identified more than 150 national options and discretions" curtailing the efficacy of the new single supervisory authority, she argued.

"The ECB strongly supports all initiatives aimed at addressing national discrepancies and reducing the complexity of the existing rules," Nouy said.

With the entry of Lithuania in the euro area in January, the ECB now directly supervises 123 banking groups comprising around 1,200 institutions and covering close to 85 percent of total banking assets in the euro area.

Around 3,500 smaller institutions are supervised indirectly by the national competent authorities (NCAs).