Principles

1
Principles

• For the SSM to work, a union body must be vested
  with ultimate supervisory authority over all EU
  banks
• ECB cannot be this body
• unless all MS join the Euro (because non-EZ MS
  can only be invited to join and since they are
  not represented in Governing Council there is
  little incentive)
• Its statutes mean it must give monetary policy
  priority over supervisory policy
• Ultimate solution Use 352114 TFEU to create a
  body (EBA or a separate entity) that has these
  powers
• Immediate solution reinforce EBA to ensure that
  
• ECB and other NSAs are equally subject to final
  say by EBA concerning application of prudential
  legislation
• EBA can address binding instructions equally to
  all NSAs and ECB (Ripasi interp. of TFEU)
• Adapt decision making in EBA to prevent the ECB
  mechanism
• Systematically dominating non-ECB MS
• Diminishing rights of opt-ins
• Enhance EBAs powers to enforce compliance with
  information requests and other decisions are
  reinforced (reflecting EP position from 2010)

2
EBA as Supreme Supervisory Authority
Enhanced powers.
EBA
Decision Making
Board of Supervisors 27 NCA with separate votes
Binding Instructions
Binding Instructions
Extra Panel for ECB-mechanism Members (to boost
voice of opt-ins)
Planning Execution Only
Permanent College enhance uniformity of
supervision
ECB Supervisory board
Non-ECB NSAs
Fully harmonised execution
Individial NSAs
agents of ECB
Red proposed changes
3
Explanations

• Enhanced powers of EBA
• Full investigatory powers over institutions
  supervisors
• Issuing Single Supervisory Handbook (Enria)
• Direct intervention in case of non-compliance
• EP position on EBA 2009
• Binding instructions
• ECB (non-)action can be corrected by binding EBA
  decision (no independence for supervisory tasks)
• Just as in the case of National Supervisory
  Auths. (NSA)
• Special Panel for ECB comp. auths.
• Possibility of challenging (via EBA) ECB decision
  affecting an opt-in
• Means that ECB decision (based on power of Gov.
  Council with no opt-ins) can be overruled by
  EBA decision (proposed by panel including
  opt-ins)
• Changed EBA voting system for Binding Mediation
• 33 only where a dispute is between ECB and
  non-ECB
• Simple majority otherwise

4
Detail on proposed Voting Mechanisms