Banking Union's accountability system in practice: A health check‐up to Europe's financial heart

Abstract

The Single Supervisory Mechanism (SSM) and Single Resolution Mechanism (SRM) form the Banking Union, which comprises EU authorities (ECB and SRB) and national authorities (NCAs and NRAs) with vast powers. Although crucial for its legitimacy, the Banking Union’s accountability is flawed, and not for the (stereo)typical reasons: accountability is a visible concept in SSM and SRM regulations, and political, administrative and judicial bodies are knowledgeable, engaged and thorough. Rather, this article posits that the SSM and SRM work very well because the legislature focused on practical details such as information flows, planning and continuity and coordination, while there has been no comparable effort to ensure the functioning of accountability tools. The result is a “system” characterised by limited access to crucial information, lack of continuity, and uncoordinated functioning. Changing this should not be hard but requires replacing blanket criticism and stereotypical views with greater attention to detail.

ECB accountability under the SSM: New dimensions of political and administrative accountability with particular focus on climate risks

“…Since MEPs' reports and answers are public by definition, there is a strong deterrent for the ECB to be more specific and candid if this jeopardizes inspections, price formation or commercial interests. 68 This could be overcome by an imaginative use of Article 20(8) of the SSM Regulation, which allows ad hoc confidential meetings 'with the Chair and Vice-Chairs of the competent committee of the European Parliament'. Although a narrow, literal reading of the provision could suggest that all confidential exchanges should include only the Chair and Vice-Chair of ECON, and of the ECB Supervisory Board, applied purposively, in light of the overarching principle of political accountability 69 the provision could be the basis for a programme of regular and thematically structured confidential checks and controls over ECB activities, involving (i) periodic confidential exchanges of documents and information; (ii) closed doors (follow-up) meetings; and (iii) where necessary, on site fact-finding visits.…”