Titles II and III: Preparation and Early Intervention

2017 ◽  
Author(s):  
Gabriel Moss QC ◽  
Bob Wessels ◽  
Matthias Haentjens
Keyword(s):  
Early Intervention ◽  
Central Bank ◽  
European Central Bank ◽  
Banking Union ◽  
Financial Situation ◽  
Single Supervisory Mechanism ◽  
European Central ◽  
Early Action ◽  
The Individual

As the European Commission has succinctly explained, ‘institutions will be required to draw up recovery plans setting out arrangements and measures to enable it to take early action to restore its long term viability in the event of a material deterioration of its financial situation. Groups will be required to develop plans at both group level and for the individual institutions within the group. Supervisors will assess and approve recovery plans’. Thus, institutions must draw up ‘recovery plans’ which are to be approved by the relevant supervisory authorities, so as to have a plan in place that might be useful to help turn around a material deterioration of the financial situation that institution may face. The ‘relevant supervisors’ are the European Central Bank (ECB) under the Single Supervisory Mechanism (SSM) for systemically important institutions, and the national supervisory authorities for less systemically important institutions, as well as for institutions outside of the Banking Union.

scholarly journals United in Diversity? The Relationship between Monetary Policy and Prudential Supervision in the Banking Union

2018 ◽  
Vol 14 (2) ◽  
pp. 283-310
Author(s):  
Matthias Goldmann
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
Financial Stability ◽  
European Central Bank ◽  
Holistic Approach ◽  
Legal Framework ◽  
Banking Union ◽  
Prudential Supervision ◽  
Single Supervisory Mechanism ◽  
European Central

Banking Union – Single Supervisory Mechanism – Economic interplay between monetary policy and prudential supervision – Strict separation envisaged by the Single Supervisory Mechanism legal framework – Legal framework does not prevent a more holistic approach – Financial stability is a legitimate consideration for monetary policy-making – Price stability is a legitimate concern for prudential supervision – Challenge to European Central Bank legitimacy and independence – Democratising the European Central Bank

scholarly journals The ECB’s accountability within the SSM framework: Mind the (transparency) gap

2019 ◽  
Vol 26 (1) ◽  
pp. 122-135
Author(s):  
Marta Božina Beroš
Keyword(s):  
Monetary Policy ◽  
Central Bank ◽  
European Central Bank ◽  
Banking Union ◽  
Positive Outcomes ◽  
Single Supervisory Mechanism ◽  
Policy Practice ◽  
European Central ◽  
Supervisory Process ◽  
Over Time

With the establishment of the Banking Union, the European Central Bank has become the main banking supervisor within the framework of the Single Supervisory Mechanism. Unlike monetary policy tasks, which the European Central Bank performs in line with numerically set objectives, supervisory ones are more difficult to quantify. At the same time, supervisory decisions entail a margin of discretion, which opens the way for potential ‘political interferences’ within the supervisory process. Considering that in supervision the European Central Bank disposes with the same level of independence as in monetary matters, concerns emerge on how to secure the European Central Bank’s accountability in this domain. Indeed, recent reports by European Union actors have warned about a ‘transparency gap’ undermining the European Central Bank’s accountability within the Single Supervisory Mechanism. This contrasts the European Central Bank’s monetary policy practice where transparency has been consistently prioritized over time with positive outcomes. This article highlights the shortcomings in respect of European Central Bank’s supervisory transparency by reviewing standards and practices in the monetary and supervisory domain. Arguing that transparency is salient to the European Central Bank’s accountability within the mechanism’s multilevel governance framework, the paper suggests potential enhancements of existent information channels in line with the unique requirements of supervision.

scholarly journals Guaranteeing the ECB’s democratic accountability in the post-Banking Union era: An ever more difficult task?

2019 ◽  
Vol 26 (1) ◽  
pp. 48-62
Author(s):  
Diane Fromage
Keyword(s):  
European Union ◽  
Central Bank ◽  
European Central Bank ◽  
Banking Union ◽  
Democratic Accountability ◽  
Unconventional Monetary Policy ◽  
The European Union ◽  
Banking Supervision ◽  
National Parliaments ◽  
European Central

Following the Great Financial Crisis, the European Central Bank’s functions have been significantly altered. It is now involved in the functioning of a variety of European Union bodies and agencies, new powers in the field of banking supervision have been attributed to it and it has resorted to unconventional monetary policy. Such a concentration of powers arguably gives rise to issues of accountability and institutional balance within the European Union: (i) the resulting institutional framework is particularly complex and difficult to understand; (ii) the numerous functions the European Central Bank assumes makes it increasingly difficult to identify in which arena(s) it should be held to account for which action; and (iii) its role in the different bodies or agencies may vary in theory and in practice, which, in turn, influences the degree to which the European Central Bank should be held to account. This article aims at showing to what extent the European Central Bank’s role has multiplied and diversified with a view to assess how it is held to account in those different instances, and what the consequences are for the European Central Bank’s democratic accountability, primarily towards the European Parliament, as well as towards the Council of the European Union and national parliaments where applicable.

scholarly journals ECB independence and accountability today: Towards a (necessary) redefinition?

2019 ◽  
Vol 26 (1) ◽  
pp. 3-16
Author(s):  
Diane Fromage ◽  
Paul Dermine ◽  
Phedon Nicolaides ◽  
Klaus Tuori
Keyword(s):  
Financial Crisis ◽  
Central Bank ◽  
European Central Bank ◽  
Banking Union ◽  
Special Issue ◽  
Monetary Policies ◽  
European Central ◽  
Introductory Article ◽  
Recent Developments ◽  
Economic And Financial Crisis

This introductory article sets the ground for the analysis performed in the articles included in this Special Issue. It shows why a new analysis of the European Central Bank (ECB)’s accountability is required by referring to recent developments, and by underlining how much the ECB’s role and standing have changed since its creation 20 years ago. Indeed, its resorting to unconventional monetary policies in response to the recent economic and financial crisis, as well as the creation of the Banking Union, have significantly affected the ECB. This introduction also recalls the main elements of the debate on the balance between accountability and independence, and shows how this balance has evolved. On the basis of the findings of the articles included in this Special Issue, some conclusions and hypotheses as to the way forward are formulated.

SREP capital ratios and due process

2016 ◽  
Vol 28 (5) ◽  
Author(s):  
Gunnar Schuster ◽  
Sebastian Pitz
Keyword(s):  
Central Bank ◽  
European Central Bank ◽  
Due Process ◽  
Evaluation Process ◽  
Single Supervisory Mechanism ◽  
European Central ◽  
Capital Ratios ◽  
Credit Institutions

AbstractThe introduction of the Single Supervisory Mechanism (SSM) and the resulting transfer of prudential bank supervisory competences to the European Central Bank (ECB) has led to material changes in the European financial supervisory landscape. One of the ECB’s key supervisory tools is the supervisory review and evaluation process (SREP). On the basis of the outcome of this process, the ECB requires significant credit institutions to hold additional own funds. This article describes and analyses the ECB’s handling of this significant regulatory tool and identifies weaknesses in applicable due process requirements.

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