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Article

The ECB’s Independence and the Principle of Separation

Journal European Journal of Law Reform, Issue Online first 2020
Keywords ECB, Banking Supervision, Banking Supervision Centralization, Prudential Supervision, European Union, EU Law, Banking Union, Central Banking Independence, SSMR, SSMR
Authors Pamela Nika
AbstractAuthor's information

    This article addresses the question of whether the European Central Bank’s (ECB’s) involvement in banking supervision is compatible with its independent status as provided by the European Union’s (EU’s) primary law, specifically with reference to the principle of separation between the ECB’s monetary policy and supervisory powers. It is found that the Single Supervisory Mechanism (SSM) Regulation provides the ECB with a set of prerequisites in pursuit of its supervisory objectives under a high level of independence. However, the article argues that the current EU regulatory framework poses risks to the overall independence of the ECB. In particular, the principle of separation, as one of the mechanisms aimed at safeguarding the ECB’s independence, is not fully achieved. In addition, the boundaries and application of macro-prudential operation of the ECB in both the SSM and European Systemic Risk Board (ESRB) remain blurry and uncertain. The article concludes by suggesting that the only way to safeguard the independence of the ECB is by carefully revising the ECB’s competencies, which may require treaty amendment.


Pamela Nika
Dr Pamela Nika is a lecturer in Corporate and Finance Law at Brunel University London.

Markus U. Diethelm
Markus U. Diethelm is the Group General Counsel of Swiss Reinsurance Company, Zurich, Switzerland (lic.iur. University of Zurich Law School. JSM/JSD Stanford University). Swiss Re is one of the world's leading and financially strongest reinsurers, with roughly 9000 employees and gross premiums in 1999 of CHF 22.4bn. Swiss Re does business from over 70 offices in more than 30 countries. The world over, Swiss Re offers its clients added value in classic insurance covers, alternative risk transfer (ART) instruments and a broad range of supplementary services for comprehensive risk management.
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