Institutional Design of Enforcement in the EU: The Case of Financial Markets

Mind the trend! Enforcement of EU law has been moving to ‘Brussels’

“…While such networks do not have direct enforcement powers on their own, the Commission, being part of these networks, can influence national enforcement through co-ordination and data, which they receive from the member states and collect on their own initiative (Coen and Thatcher 2008;Cseres 2016;Kekelekis 2009;Levi-Faur 2011;Wilks 2005). It is important to note that connecting national relevant authorities within a network may be seen as a first step towards moving enforcement to the EU level in the shape of an EU agency with possibly more enhanced enforcement authority (LeviFaur 2011), e.g., the case of ESMA (Scholten and Ottow 2014). Taking a functional approach, some EU agencies which assist the Commission and/or the member states in the implementation of EU law and policies can also be considered as EU enforcement networks.…”

“…Substantively, an incorrect transposition (whether or not this is on purpose) and (political) unwillingness could lead to nonimplementation (see also Thomann and Zhelyazkova (2017) on the differences between de jure and de facto implementation). In addition, differences in national laws and procedures could result in disparities in the uniform application of EU law and the ineffectiveness of EU policies (Scholten and Ottow 2014).…”

“…It is important to note that EEAs vary greatly with regard to their powers and the degree of power sharing with the Commission and national counterparts. This can influence the discussed potential and result in different models of EU direct enforcement (Heidbreder 2015;Scholten and Ottow 2014). Since this field is understudied, it is unclear how far EEAs are exposed to the problems faced by national enforcement authorities (such as a lack of resources) or whether they could face additional challenges, e.g., an impossibility to oversee the extensive EU territory or less trust by the supervised in arguably less legitimate and trusted EU entities.…”

“…Networks of enforcement authorities bring together national counterparts and the Commission, and could be used as a venue for promoting convergence and 'naming and shaming' when it comes to late and incorrect transposition, non-application and problematic enforcement in terms of an unwillingness to co-operate and enforce and a lack of resources (Ottow 2012). Since these structures have predominately co-ordinating rather than strong direct enforcement powers, their enforcement capacity can be limited (e.g., the case of three financial networks in the EU [Scholten and Ottow 2014]). However, they could promote the implementation of EU policies by enhancing mutual learning and co-operation by relevant authorities (Groenleer et al 2010).…”

“…This challenges the system of controls (e. The most recent example concerns the European Central Bank (ECB). As of November 2014, it is 'exclusively competent' (Article 4, Regulation 1024/2013) to supervise significant credit institutions, representing almost 85 per cent of total banking assets in the euro area (Scholten and Ottow 2014). Is it also exclusively accountable for financial supervision?…”