The Application of National Banking Supervision Law by the ECB: Three Parallel Modes of Executing EU Law?

Abstract

The Single Supervisory Mechanism (SSM), which establishes the European Central Bank's (ECB) competence for the prudential supervision of banks, will assume operations in the course of 2014. This mechanism will have to rely on various acts across which the material provisions of EU banking regulation are to be found: regulations, directives and national statutes that implement directives. The purpose of this paper is to examine different ‘modes' of executing substantive European legal provisions, that is, the avenues by which the legal norms are translated into binding decisions which are addressed to a specific credit institution, in an individual case. After setting out the context in which the establishment of the SSM is taking place, this paper concludes that the SSM Regulation contains three such modes for executing banking law: direct powers drawn from the SSM Regulation itself; powers of instruction for the ECB to command national supervisors to use their powers under national law in a particular way; and an application of national statutes by the ECB as a European organ. The first mode is trivial; the second is not novel, but such powers have significantly expanded in the SSM Regulation; and the third mode is genuinely novel. This paper discusses the three modes and attempts to conceptualize the third in a theoretical framework. It also discusses the implications of the three modes regarding the availability of judicial review.