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. |
Search result: 18 articles
Article |
The ECB’s Independence and the Principle of Separation |
Journal | European Journal of Law Reform, Issue 3 2020 |
Keywords | ECB, Banking Supervision, Banking Supervision Centralization, Prudential Supervision, European Union, EU Law, Banking Union, Central Banking Independence, SSMR, SSMR |
Authors | Pamela Nika |
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Journal | Erasmus Law Review, Issue 2 2020 |
Keywords | effectiveness, effectiveness measurement methodologies, financial legislation, legislative objective, product approval governance |
Authors | Jeroen Koomans |
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How can you determine if financial legislation is effective? This article seeks to identify three characteristics that make up the basis for an effectiveness review, being the determination what the legislative objective is, who is it aimed at and what approach is taken to achieve this objective. Determining the legislative objective may prove to be a challenging undertaking, and the uncertainties that come with that affect the other two characteristics as well. And even if a clear legislative objective can be established, how can you be sure that its achievement was in fact attributable to the legislation under review? What do you compare your results to absent a baseline measurement and how can the vast number of variables that affect the effectiveness of the legislation under review be accounted for, if at all? Is effectiveness in financial legislation at all measurable and, when measured, what is its value in practice? |
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Journal | Erasmus Law Review, Issue 2 2020 |
Keywords | Basel Accords, EU Law, shadow banking, financial stability, prudential regulation |
Authors | Katarzyna Parchimowicz and Ross Spence |
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In the aftermath of the 2007 global financial crisis, regulators have agreed a substantial tightening of prudential regulation for banks operating in the traditional banking sector (TBS). The TBS is stringently regulated under the Basel Accords to moderate financial stability and to minimise risk to government and taxpayers. While prudential regulation is important from a financial stability perspective, the flipside is that the Basel Accords only apply to the TBS, they do not regulate the shadow banking sector (SBS). While it is not disputed that the SBS provides numerous benefits given the net credit growth of the economy since the global financial crisis has come from the SBS rather than traditional banking channels, the SBS also poses many risks. Therefore, the fact that the SBS is not subject to prudential regulation is a cause of serious systemic concern. The introduction of Basel IV, which compliments Basel III, seeks to complete the Basel framework on prudential banking regulation. On the example of this set of standards and its potential negative consequences for the TBS, this paper aims to visualise the incentives for TBS institutions to move some of their activities into the SBS, and thus stress the need for more comprehensive regulation of the SBS. Current coronavirus crisis forced Basel Committee to postpone implementation of the Basel IV rules – this could be perceived as a chance to complete the financial regulatory framework and address the SBS as well. |
Article |
The European Investment BankAn EU Institution Facing Challenges and Providing Real European Added Value |
Journal | Hungarian Yearbook of International Law and European Law, Issue 1 2019 |
Keywords | European Investment Bank, status and role of development banks, Green Bonds, European Fund for Strategic Investments (EFSI), InvestEU |
Authors | Zsolt Halász |
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Multilateral banks play an important role in financing larger investment projects within the EU and in most parts of the world. These institutions are less known than that commercial banks, even though many of these institutions – and in particular, the European Investment Bank – have provided a truly remarkable volume of financial support for the countries where they operate, including EU Member States. This paper introduces the largest of the multilateral financial institutions: the European Investment Bank. It elaborates on the specific regulatory framework applicable to its structure and operation as well as a number of special characteristics affecting this institution exhibiting a unique dual nature: a multilateral bank and an EU institution. This paper examines the complexity of the EIB’s operation, in particular, the impact of external circumstances such as EU enlargements of the past and the Brexit issue in the present. Beyond these specific questions, generic issues relating to its operations, governance, the applicable specific prudential requirements and the non-supervised nature of multilateral financial institutions are analyzed as well. This paper also reflects on the EIB’s unimpeachable role in financing the EU economy and on its pioneering role in bringing non-financial considerations, such as environmental protection into the implementation of financial operations. |
Article |
Statutory Forfeiture and the U.S. Space Resource Exploration and Utilization Act of 2015 |
Journal | International Institute of Space Law, Issue 2 2017 |
Authors | George Anthony Long |
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Article |
Quo Vadis, Europa?Loopholes in the EU Law and Difficulties in the Implementation Process |
Journal | European Journal of Law Reform, Issue 2 2016 |
Keywords | EU Law, Quality of Legislation, Loopholes, Implementation, Joint Practical Guide |
Authors | Markéta Whelanová |
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EU law is a very wide-ranging legal system that comprises thousands of legal acts. It endeavours to regulate many relationships in the Member States of the European Union and effects everyday lives both of individuals and public bodies. EU law is, however, not always positively accepted. Such non-acceptance often follows from the increasing number of cases when EU law cannot be effectively applied on the national level. Significant reason for that lies in the poor quality of EU law. |
Article |
Political and Legal Accountability in the European Banking UnionA First Assessment |
Journal | Hungarian Yearbook of International Law and European Law, Issue 1 2016 |
Authors | Menelaos Markakis |
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Article |
Challenges Related to the Power of the European Central Bank to Apply National Law |
Journal | Hungarian Yearbook of International Law and European Law, Issue 1 2016 |
Authors | Olivier Voordeckers |
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Article |
Financial Crime Prevention and ControlThe Reforms of a ‘Unique’ Jurisdiction under EU Law and International Standards |
Journal | European Journal of Law Reform, Issue 4 2015 |
Keywords | Vatican financial system, money laundering, terrorist financing, 3rd AMLD, FATF Recommendations |
Authors | Francesco De Pascalis |
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Between 2011 and 2014, the Vatican City State (VCS) experienced a reform process which dramatically changed its financial system. The process is still ongoing, and its goal is to establish an anti-money laundering and counter-terrorism financing (AML/CTF) system. Importantly, this system will be based on the AML/CTF EU legislation and international standards. These facts are noteworthy. First, the reforms cast light on the main Vatican financial institutions against the background of the secrecy that has always characterized their functioning and business operations. Accordingly, there is now more transparency and information about the Vatican financial system. Second, the relevant EU law and international standards are tools through which the VCS can, for the first time, join an international network of countries, sharing and applying the same rules against money laundering (ML) and terrorist financing (TF). This is of extraordinary importance for a jurisdiction like the VCS, which has never referred to European or international principles in its rule-making. In particular, the openness to EU law and international standards stimulates investigating the reasons behind these changes and the impact that these sources of law are having on a jurisdiction regarded as ‘unique’ in the world. |
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Journal | The Dovenschmidt Quarterly, Issue 2 2015 |
Keywords | organizational liability, tort law, organizational design, organizational wrongdoing, law and economics |
Authors | Klaus Heine and Kateryna Grabovets |
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Organizational accidents have two generic sources: individual wrongdoings and organizational failures. Economic analysis of tort law is methodologically based on the “fiction” (Gordon 2013) of a rational individual, from which “simple rules for a complex world” (Epstein 1995) are derived. As a result, organizational wrongdoing boils down to a simple principal-agent problem, neglecting the complexity of organizational reality. We shed more light on organizational factors as a separate trigger of organizational wrongdoing. We take an interdisciplinary perspective on the problem, which challenges traditional economic analysis of tort law with insights drawn from organizational science. Moreover, we demonstrate how tort law and economic analysis can be enriched with these insights. |
Article |
Banking Union: Why Opting Out Is a Viable Alternative |
Journal | Hungarian Yearbook of International Law and European Law, Issue 1 2015 |
Authors | Péter Fáykiss, Dániel Papp and Anikó Szombati |
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Article |
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Journal | The Dovenschmidt Quarterly, Issue 1 2015 |
Keywords | corporate governance, board independence, independent non-executive or supervisory directors, listed family businesses, minority expropriation problem |
Authors | Fabian Imach |
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This contribution analyzes whether the current focus of the EU regulator on empowering independent directors is effective in corporations with a concentrated (family) ownership structure. The basic hypothesis of this contribution is that, contrary to the excessively optimistic expectations of the EU regulator, there are serious inefficiencies in the concept of independent directors when it comes to concentrated (family) ownership structures. The contribution relies on a series of empirical studies indicating a positive correlation between operating performance and family influence in European stock corporations. |
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Beyond Financialisation?Transformative Strategies for More Sustainable Financial Markets in the European Union |
Journal | European Journal of Law Reform, Issue 4 2014 |
Keywords | financialisation, financial market integration, financial reform, financial innovation, financial crisis |
Authors | Dieter Pesendorfer |
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The global financial crisis has led many regulators and lawmakers to a rethinking about current versus optimum financial market structures and activities that include a variety and even radical ideas about deleveraging and downsizing finance. This paper focuses on the flaws and shortcomings of regulatory reforms of finance and on the necessity of and scope for more radical transformative strategies. With ‘crisis economics’ back, the most developed countries, including the EU member states, are still on the edge of disaster and confronted with systemic risk. Changes in financial regulation adopted in the aftermath of the financial meltdown have not been radical enough to transform the overall system of finance-driven capitalism towards a more sustainable system with a more embedded finance. The paper discusses financialisation in order to understand the development trends in finance over the past decades and examines various theories to describe the typical trends and patterns in financial regulation. By focusing on a limited number of regulatory reforms in the European Union, the limitations of current reforms and the need for additional transformative strategies necessary to overcome the finance-driven accumulation regime are explored. Finally, the regulatory space for such transformative strategies and for taming finance in times of crisis, austerity, and increased public protest potential is analysed. |
Article |
Shifting from Financial Jargon to Plain LanguageAdvantages and Problems in the European Retail Financial Market |
Journal | European Journal of Law Reform, Issue 3 2014 |
Keywords | financial markets, financial information, PRIPs/KIIDs, financial jargon, plain language |
Authors | Francesco De Pascalis |
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The purpose of this paper is to discuss the European regulatory efforts to guarantee investors a proper understanding of the characteristics of the products being offered in the retail financial market. In particular, the analysis emphasises the proposal to introduce plain language as a mandatory requirement for drafting pre-contractual documents relating to retail financial products. |
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Journal | Netherlands Journal of Legal Philosophy, Issue 3 2013 |
Authors | Antony Duff |
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This paper explores the roles that the presumption of innocence (PoI) can play beyond the criminal trial, in other dealings that citizens may have with the criminal law and its officials. It grounds the PoI in a wider notion of the civic trust that citizens owe each other, and that the state owes its citizens: by attending to the roles that citizens may find themselves playing in relation to the criminal law (such roles as suspect, defendant, convicted offender and ‘ex-offender’), we can see both how a PoI protects us, beyond the confines of the trial, against various kinds of coercion, and how that PoI is modified or qualified as we acquire certain roles. To develop and illustrate this argument, I pay particular attention to the roles of defendant (both during the trial and while awaiting trial) and of ‘ex-offender,’ and to the duties that such roles bring with them. |
Article |
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Journal | The Dovenschmidt Quarterly, Issue 2 2013 |
Authors | Edyta M. Dorenbos and Alessio M. Pacces |
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Article |
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Journal | The Dovenschmidt Quarterly, Issue 2 2013 |
Keywords | Credit Rating Agencies, Regulation No. 1060/2009, ESMA, sovereign ratings, complex products ratings |
Authors | Edith Weemaels |
AbstractAuthor's information |
This article presents the current and future statutory framework for ratings agencies in Europe. The recent financial and economic crises dealt a fatal blow to this practice and the EU clearly intends to progress as quickly as possible when it comes to the regulation of credit rating agencies. This article examines the possibility that new EU framework serve to strengthen the position of credit rating agencies through the elimination of their unquestioned role in the markets. The author also presents existing and future European regulations and analyses the establishment and implementation of prudential supervision of the rating activity. |
Article |
The Harmonization of Law Against Economic Crime |
Journal | European Journal of Law Reform, Issue 4 1999 |
Authors | Mark Pieth |
Author's information |