Principles
•
•
For the SSM to work, a union body must be vested with ultimate
supervisory authority over all EU banks
ECB cannot be this body
– unless all MS join the Euro (because non-EZ MS can only be invited to join and
since they are not represented in Governing Council there is little incentive)
– Its statutes mean it must give monetary policy priority over supervisory policy
•
•
Ultimate solution = Use 352+114 TFEU to create a body (EBA or a
separate entity) that has these powers
Immediate solution = reinforce EBA to ensure that :
– ECB and other NSAs are equally subject to final say by EBA concerning
application of prudential legislation
• EBA can address binding instructions equally to all NSAs and ECB (Ripasi interp. of
TFEU)
– Adapt decision making in EBA to prevent the ECB mechanism
• Systematically dominating non-ECB MS
• Diminishing rights of “opt-ins”
– Enhance EBA’s powers to enforce compliance with information requests and
other decisions are reinforced (reflecting EP position from 2010)
EBA as Supreme Supervisory Authority
+Enhanced powers.
Decision Making
EBA
Binding
Instructions
Board of Supervisors
27 NCA with separate votes
Binding
Instructions
Extra Panel for ECB-mechanism
Members (to boost voice of “opt-ins”)
Planning & Execution Only
ECB Supervisory board
Permanent College –
enhance uniformity of supervision
Non-ECB
NSAs
Fully harmonised
execution
Individial = agents of ECB
NSAs
Red = proposed changes
Explanations
•
Enhanced powers of EBA
–
–
–
–
•
Full investigatory powers over institutions & supervisors
Issuing Single Supervisory Handbook (Enria)
Direct intervention in case of non-compliance
+ EP position on EBA 2009
Binding instructions
– ECB (non-)action can be corrected by binding EBA decision (no independence
for supervisory tasks)
– Just as in the case of National Supervisory Auths. (NSA)
•
Special Panel for ECB comp. auths.
– Possibility of challenging (via EBA) ECB decision affecting an “opt-in”
– Means that ECB decision (based on power of Gov. Council with no “opt-ins”) can
be overruled by EBA decision (proposed by panel including “opt-ins”)
•
Changed EBA voting system for Binding Mediation
– “3+3” only where a dispute is between ECB and non-ECB
– Simple majority otherwise
Detail on proposed Voting Mechanisms
Motivation: to counterbalance inevitable weight of EZ Member States in supervisory decision making in the light of the proposed
ECB mechanism
QM = majority including 3 EZ members and 3 non-ECB members
Panel 1 = chair + 1 ECB member + 1 non-ECB
Panel 2 = 17 EZ + "opt-ins"
Dispute between ...
Decision applies to
...
Decision proposed
by
ECB and non- ECB
ECB
Non-ECB
ECB or "opt-in" MS
Panel 1
Panel 1
Panel 2
ECB and "opt-in"
MS
Decision adopted
by Board of
Supervisors unless
rejected by
QM
Simple majority
Simple Majority
Consequences:


1
Its harder to block a decision directed at the ECB than at non-ECB - this is fair given the inbuilt majority of ECB participants
"opt-ins" who have no vote on the ECB Governing Council, have a (slightly1) better chance of defending themselves via EBA,
where they disagree with an ECB decision
The more opt-ins there are, the higher this chance.