Accountability in the SRB

AuthorBrito Bastos, Filipe; Zeitlin, Jonathan
IPOL | Economic Gove rnance Support Unit
22 PE 645.747
legality of those instructions, once the NCA adopts decisions in res pect of the cr edit ins tit ution s (Türk
and Xa ntho ulis 2019).
3.3.6. Scope of t he ECB’s m andate to app ly national law
One of the most unique legal issues of the SSM concerns the ECB’s mandate to apply national law. It is
a mandat e without precedent in any other field of EU law. Article 4(3) SSMR prov ides: “For th e purpose
of carrying out the tasks conferred on it by this Regulation, and with the objective of ensuring high
sta ndar ds o f super visio n, the ECB shall app ly all relevant Union law, and wh ere t his Un ion law is
composed of Directives, the national legislation transposing those Directives. Where t he relevant
Union law is composed of Regulations and where currently those Regulations explicitly grant options
for Member St ates, th e ECB shall apply als o th e nat ional legis latio n exercising tho se optio ns.”
What exactly “national law transposing directives” means has remained a matter of intense debate
amon g academics a nd pra ctitioners (Wit te 2016; de Guindos 2019; Prek 2019). The ECB m ay certainly
apply nationa l laws that implemen t verba tim pro visions of th e Capit al Req uiremen ts Direct ive, or
national leg islat ion en acted specifically t o t ran spose EU Dir ectives in banking law. What is more
controversial is whether, for instance, the ECB must apply national laws which, though not adopted
specifically to trans pose EU Directives or even precede those Directives , are presupposed by the
national laws that NCAs would have to apply. One author points out, for instance, that the ECB is not
subject to national administrative law, but that its mandate to apply national law arguably should
include the national procedural rules concerning NCAs’ deadlines to take decisions (Arranz 2017;
Wissin k 2017).
4.1. Purpose and architecture
The Single Reso lution Mechanism (SRM), which constitutes the second pillar of the Banking Union, has
the primary purpose of providing a uniform framework for the orderly resolution of failing banks in a
manner which reduces the potential costs to taxpayers, and which protects depositors, as much as
possible. To t hat end, a n ew EU Agency has been set up, th e Single Resolution Board (SRB). The SRB has
an especially import ant role when the recovery of a bank becomes unlikely. It drafts resolution plans
and tak es the lead in initiating the r esolution pr ocess, if need be by resor ting to th e Single Resolution
Fund (SRF), owned by the SRB and financed by contributions from credit institutions that fall under the
scope of the S SM.
Much as in the SSM, the responsibility for the resolution of bank s is divided between Nat ional
Resolution Authorities (NRAs) and the SRB depending on their size. In broad terms, the SRB has
juris diction over the s ignifica nt credit inst itutions th at fa ll under the su pervisor y jurisd iction of t he ECB
in the SSM; NR As h ave ju risdict ion o ver les s s ignificant credit institu tions.
The governance of the SRM is notoriously complex, and its decision-making processes involve “close
cooperatio n” between the SRB and NR As, as well as coopera tion between the SR B, the ECB (which has
an important role in assessing whether a bank is failing or likely t o fail), the Commission, and the
Council. Part of this complexity results from the fact that, unlike the ECB, the SRB is neither an EU
institution nor an EU body established in the Tr eaties, which implies that only limit ed and clea rly
circumscribed powers could be delegated to it under the CJEU’s Meroni doctrine (see fo r instance Case
C-270/12, United Kingdom v European Parliament and Council (ES MA)). For that reason, the final decision
on the resolution of a credit institution must be taken by the Commission and the Council, even though
measur es to res olve a bank are pr oposed by the SRB.

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