Possibilities for improvement

AuthorBrito Bastos, Filipe; Zeitlin, Jonathan
IPOL | Economic Gove rnance Support Unit
26 PE 645.747
5.1. General approach
Dynamic, forward-looking rather than backward-looking princip al-agen t acco unt abilit y is more
appropr iate for independent bodies like the ECB/SSM and the SRB, oper ating in technically complex,
rapidly evolving environments under conditions of high uncertainty, where parliaments and other
politica l a uth orit ies have v ery limited s anctioning power s. T he pr eferr ed account abilit y approach
should th erefore be to build on the inter nal review and quality a ssurance processes of th e institutions
themselves , requesting the ECB and SRB to ma ke the findings of its internal bodies publicly available
(subject to constraints on professional secrecy). The EP, the Council, and national parliaments could
then use these findings to scrutinize the operations and effectiveness of the SSM and the SRB, and to
stimulat e public debate about t hem. The CJEU and th e Eur opean Ombudsman could likewise us e the
findin gs of such b odies , includin g th e ECB A dminis tra tive B oard o f Rev iew (AB oR) and the SR B A ppeal
Panel, to review the pr ocedu ral fa irnes s, just ificatio n, and co nsiste ncy of th eir decis ions , provid ed that
thes e ar e mad e publicly available in suit ably reda cted form to a void compr omis ing the business
confid entia lity of the a pplicant s.
5.2. The limits of other pr oposed solut ions
5.2.1. Incre ased r eli ance on confide ntial provi sio n of info rmati on and doc ument s t o
the EP through in camera briefings and secure reading rooms
One s olution that we were as ked to consider is increa sed pro vision o f confident ial inform ation and
documents to the EP through in camera briefings and secur e reading rooms . Given the lack of
parliamentary sanctioning powers, provision of information under such circumstances cannot be
expected to lead to consequen ces for the bodies in ques tion, while secrecy and con fidentia lity also
mean tha t this information cannot be used to stimulate parliamentary and public debate. Hence this
approach cannot be expected to contribute significantly to either the political accountability or the
public legitimacy of these bo dies. Furt her grounds for scepticism abou t the poten tial effectiveness of
this approach may be drawn from comparative experience with sharing of secret intelligence
inform ation with le gislative ov ersight comm ittees (Curtin 2014: 28; Curt in 2017: 38), which in the US
case has been described as creating “the appearance, but not the reality that Congress checks
executive power” (Clark 2012: 14). Also r elevant here is experience with the EP’s a ccess to confident ial
documents on the Transatlantic Trade and Investment Partnership (TTIP) n egot iations, which does not
appear to have enhanced eith er the latt er’s legitimacy or their public acceptance (Young 2017: ch. 5).
5.2.2. Publication of a formal, quantified framework of indicators and metrics for
moni toring and assess ing SSM/SRB pe rformance
Given the breadth and multiplicity of the SSM’s objectives, together with the complexity and fast-
moving environment in which it operates, this principal-agent approach to accountability proposed by
the ECA (2016) and other commentators (e.g. Amtenbrink and Ma rkakis 2019; Nicolaide s 2019) is
unlikely to be effective, in our v iew. It could ev en prove counter-pro ductive, by presenting an over-
simp lified p ictur e of the SS M’s o perat ions , which co uld in so me cas es be har mful t o fina ncial sta bility
by provo king adverse market react ions. The SRB publishes a regularly updated set o f Key Performance
Indicators (SR B 2019a: Annex 8), but t hese are almo st entirely o utput-based (e.g. t he number o f bank
resolution plans completed), and thus provide little insight into the Boar d’s effectiveness in achieving
its b road er ob jectives (m aintain ing financia l sta bility while p rote cting pub lic finances fr om bear ing the
costs of bank failures). Nor do MEPs refer to these KPIs in written questions to the SRB.

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