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The EU Bank Recovery and Resolution Directive (BRRD) shifts the focus from reacting in the face of a crisis, to planning and preparing to avoid uncoordinated, ad hoc measures and aims to ensure banks resolvability; it strengthens and harmonizes early intervention measures and gives supervisors new tools and powers for managing failing banks while continuing part of their business, i.e. critical functions. The BRRD was conceived out of a need to reduce public funds being used to bail out banks considered 'too big to fail' and strengthen cooperation and coordination between Member States. The first part of this paper sets out how key resolution decisions, including during recovery and resolution planning, are taken for cross-border banking groups within the EU, and within the Single Resolution Mechanism (SRM) of the euro area. It also considers the impact of the BRRD on cooperation with third countries (small host countries). The second part of the paper offers a legal analysis of why no autonomous centralized decision-making powers were delegated to the Single Resolution Board (SRB). It considers whether legal judgements made in 1956 and enshrined as the ' Meroni doctrine' actually prohibit delegation of fully autonomous resolution powers to the SRB and more broadly prevent the creation of a centralized resolution agency for the whole EU. [ABSTRACT FROM AUTHOR]

With the institutional setting for the Banking Union having been established and become fully operational, market participants, supervisory staff, and academics are gradually getting to terms with the reality of the new two-tier system of supervisory and resolution authorities within the Eurozone. Drawing from media coverage, input from practitioners and the on-going academic debate, the present article seeks to present an-inevitably provisional-assessment of the new regime from a German perspective. While regulatees and their advisers within the country appear to have got used to the new reality, the paper also identifies a number of residual concerns, some of which are attributable to the specific characteristics of the German financial sector, others indicative of broader problems. [ABSTRACT FROM AUTHOR]

The establishment of centralized supervision by means of the Single Supervisory Mechanism (SSM) had to ensure the quality and impartiality of banking supervision, as well as the establishment of a supervisory system more properly aligned with the characteristics of the banking sector. The far-reaching mixed administration of the European Central Bank (ECB) and national competent authorities (NCAs) must also ensure strong and consistent supervision across the participating member states while using the NCAs' local and specific know-how. All elements indicate that a more effective banking supervision was necessary for the Eurozone. This may be challenging given the conflict between the required centralisation of supervision, on the one hand, and the far-reaching mixed administration and composite legal order in place on the other. The first years of experience with the SSM provide a multi-faceted picture of the effectiveness of centralised supervision. This paper discusses the effectiveness of centralised supervision within the context of a far-reaching mixed administration and legal order on the basis of three different elements. Firstly, the basis of supervision is discussed, i.e. the applicable substantive laws for which compliance must be ensured by the ECB, and which concerns the so-called Single Rulebook. Secondly, the organisation of supervision, in practice, is discussed on the basis of one of its most important features: the Joint Supervisory Teams. Lastly, the delineation of supervisory tasks is discussed, as well as its impact on the ECB and, based on the Dutch example, its impact on national supervisory models. These elements illustrate the many steps that have been taken to improve the effectiveness of centralised supervision. They also show how many obstacles are still left to overcome. [ABSTRACT FROM AUTHOR]

This article examines the administrative remedy provided by the Administrative Board of Review (ABoR) of the European Central Bank (ECB), as part of the broader issue of the right of defence of natural and legal persons vis- à- vis ECB supervisory decisions within the Single Supervisory Mechanism (SSM). After presenting an overview of the review panels established in the financial sector in the EU, the article describes the experience with the ABoR by analysing its composition, its mandate and scope of review, the main procedural aspects and the relationship with judicial proceedings before the European Court of Justice. Particular attention is given to the substantial issues dealt with by the ABoR in its Opinions and to some of the major challenges faced in the first 2 years of practice. Among them is the assessment of the correct application of national laws implementing EU legislation by the ECB. The paper identifies two aspects giving particular cause for concern and requiring legislative reforms: (1) the assessment of the suitability of the members of management bodies (fit and proper assessment) and (2) the inclusion of bank holding companies within the scope of banking supervision. [ABSTRACT FROM AUTHOR]

One of the most innovative features of Basel III was the introduction of a new 'countercyclical' regulatory dimension for banks. In 2013, this dimension was operationalised in the European prudential framework included in the CRR/CRD IV package. Although the uniform implementation of these rules has been welcomed by the European legislator as creating a level playing field for banks and investment firms, this legal analysis reveals the existence of serious competitive disadvantages for small local and regional banks. While the largest entities are incentivised to exploit the arbitrage opportunities hidden in the CRR/CRD IV countercyclical provisions, such opportunities are not available to smaller entities. Thus, the unintended result of the new prudential framework seems to be not only a re-sizing of the banking balance sheets, but also a re-composition of the banking structures. In this paper, one of the building blocks of the Legal Theory of Finance, i.e., the construction of finance as a legal by-product is taken as a point of departure to show how the adoption of the new countercyclical rules paves the way for a new consolidation wave in the banking industry. [ABSTRACT FROM AUTHOR]