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The EBA and the Banking Union

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Abstract

In the last 5 years, the European institutional architecture of banking regulation and supervision has undergone sweeping changes, brought about by a number of sequential legislative initiatives. Such a ‘Copernican revolution’ naturally calls for investigating whether and how these different layers of reforms add up to (or can be interpreted in a way that ensures) an overall consistent, efficient and effective design for banking regulation and supervision. This is particularly the case for the European Banking Authority (EBA) and the Banking Union (BU), two new institutional players which in the public debate are sometimes dubbed as overlapping or even conflicting. This paper provides a critical analysis of this interplay and its components, also with the aim to provide food for thought for further exploration, from a private as well as a public law perspective. It starts from the reasons behind the foundation of the EBA and the BU, showing how these two new institutional players in fact were created to pursue two distinct and complementary goals and operate on two separate but interconnected institutional levels. The paper then dwells on the panoply of innovative regulatory tools which the EBA can deploy in order to accomplish its mission to foster maximum harmonisation and the creation of a single set of common rules (the ‘Single Rulebook’ or SR): technical standards, guidelines and recommendations, and other ‘soft law’ instruments, such as the Q&A tool. The analysis aims to stimulate further critical thinking on the scope and possible impact of these tools and their consistency within the overall European framework of legal sources. Hence, the focus moves to the main areas covered by the SR (i.e., prudential rules and resolution) and the priorities followed in its build-up, highlighting how these priorities can contribute to the effective functioning of the two current components of the BU, i.e., the SSM and the SRM. The paper concludes with some remarks on areas of possible improvement and development, underlining the need to: (i) step up the harmonisation of corporate and insolvency laws, given their impact on cross-border banking and cross-border resolution; (ii) provide more certainty on the scope and possible effects of the EBA’s mediation role; and (iii) rethink the governance of the EBA, if there is to be a more balanced interplay between national and European drivers.

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Notes

  1. For a more articulated description of the various stages of the integration process and the different institutional drivers, see Teixeira (2014), at p 533.

  2. As Enria (2013), at p 48, remarks: ‘In building up the Single Market and the Economic and Monetary Union (EMU), European policy makers gave a clear signal to the banks: they were invited to consider the EU as their domestic market and to create a dimensional and organizational structure reflecting the new institutional setup. The wave of mergers that characterized European banking in the early 2000s effectively brought European banks to a dimension commensurate with the new boundaries of their reference market.’

  3. Padoa-Schioppa (2004).

  4. de Larosière (2009)

  5. For an articulated description of these issues, also in quantitative terms, see Enria (2013), at p 51.

  6. Spinelli (1999), at p 348.

  7. For a detailed account of the events and decisions taken in this context, see Teixeira (2014), at p 542; Brescia Morra (2014), at p 3.

  8. Council Regulation (EU) No. 1024/2013 of 15 October 2013.

  9. Regulation (EU) No. 806/2014 of the European Parliament and of the Council of 15 July 2014.

  10. For a thorough discussion of this risk, see Ferran (2014).

  11. E.g., for prudential rules, see Directive 2013/36/EU of the European Parliament and of the Council on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (known as CRD IV) and Regulation (EU) No. 575/2013 of the European Parliament and of the Council on prudential requirements for credit institutions and investment firms (known as CRR). For the crisis management part, see Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms (known as BRRD) and Directive 2014/49/EU of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (known as DGSD).

  12. Regulation (EU) No. 1093/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Banking Authority).

  13. For a thorough analysis of the EBA’s regulatory toolkit, see also Chiti (2015), at p 9.

  14. See, e.g., Chiti (2015), at p 5; Moloney (2014), at p 1660; Scholten and van Rijsbergen (2014), at p 389.

  15. Another interesting feature concerns the preconditions under which guidelines and recommendations can be issued on an own initiative basis, i.e., without a specific mandate under the L1 provisions. On this issue, see Chiti (2015), at pp 10–11.

  16. Decision of the Board of Appeal of the European Supervisory Authorities given under Article 60 of Regulation (EU) No. 1093/2010 and the Board of Appeal’s Rules of Procedure (BoA 2012 002), Appeal by SV Capital OÜ against European Banking Authority.

  17. § 56 of the Decision states that ‘even on the basis that the EBA Guidelines are not legally binding, they address the matter from a practical perspective, and assist in the interpretation of the scope of the provisions of Directive 2006/48/EC’.

  18. Ingves (2011).

  19. Which stems from the initiative adopted at international level by the G-20 and the FSB, see Hüpkes (2013).

  20. For a thorough analysis of the new rules of the BRRD, see Binder (2015).

  21. In particular, on these TS and GLs, see Gardella (2015).

  22. The lack of clarity is also mentioned in European Commission, Report (2014), at p 7.

  23. The issue is also noted in ibid, at p 9.

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  1. Rome, Italy

    Stefano Cappiello

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Correspondence to Stefano Cappiello.

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The opinions expressed are exclusively personal. The article draws on a presentation given and on the benefits of a discussion held at the symposium ‘The Banking Union and the creation of duties’, organised at the European University Institute on 19–20 March 2015.

S. Cappiello: Qualified as Associate Professor of Economic Law (Italy), LLM (University of Chicago), Ph.D. (University of Viterbo), NYU Hauser Fellow, lawyer (Italy).

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Cappiello, S. The EBA and the Banking Union. Eur Bus Org Law Rev 16, 421–437 (2015). https://doi.org/10.1007/s40804-015-0016-9

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