European Central Banking Law: The Role of the European Central Bank and National Central Banks under European Law (Palgrave Macmillan Studies in Banking and Financial Institutions)

European Central Banking Law
	Preface
	Abbreviations
	Contents
	Contents
	Contents
	Part I: Definition and Evolution of European Central Banking Law
	Chapter 1: The Functions of Central Banks and Definition of European Central Banking Law
		1.1 An Overview of Central Banks’ Functions
			1.1.1 The Basic Concepts for the Analysis: Monetary System—Financial System—Payment and Settlement Systems
				Introductory Remarks
				The Monetary System
				The Financial System
				Payment and Settlement Systems
			1.1.2 The Monetary Policy Function of Central Banks
				‘Conventional’ Monetary Policy
				‘Unconventional’ Monetary Policy
			1.1.3 Financial Stability Function(s) of Central Banks
				Introductory Remarks—The Components of the ‘Bank Safety Net’
				Micro-prudential Banking Regulation and Supervision
					General Remarks
					Institutional Aspects Relating to Banking Supervision
					Separation of Monetary Policy from Banking Supervision Tasks
				Macro-prudential Policies
					Content
					Policy Instruments
				Management of Solvency Crises—The (Presently) Predominant Role of Banking Resolution
			1.1.4 Central Banks’ Functions in Relation to Payment and Settlement Systems
			1.1.5 Promotion of Financial Inclusion and Literacy by Central Banks
		1.2 European Central Banking Law as a Synthesis of European Monetary and Financial Law
			1.2.1 An Introduction to the Hierarchy of Norms Under EU Law
			1.2.2 European Monetary Law
				Monetary Unification as the Conceptual Basis of European Monetary Law
				A Definition of European Monetary Law
			1.2.3 European Financial Law
				Financial Integration as the Conceptual Basis of European Financial Law
				Main Aspects of European Financial Law
					Definition, Field of Application and Sources of European Financial Law
					The Impact of Public International Financial Law on the Shaping of European Financial Law
				The Branches of European Financial Law
					Introductory Remarks
				European (EU) Banking Law
				The Other Branches
			1.2.4 A Synthesis: European Central Banking Law
		Secondary Sources
	Chapter 2: The Establishment of the European System of Central Banks and the Eurosystem
		2.1 The Treaty of Maastricht as the Foundation of EMU Law
			2.1.1 The Road Towards European Monetary Unification
				The Political Decision to Establish a Monetary Union and the Initial Attempts
				International Institutional Parameters
				The Delors Committee Report
					The Report’s Proposals
					The Political Adoption of the Report’s Proposals
			2.1.2 The Fundamental Choices of the Treaty of Maastricht
		2.2 The Choice for the Concurrent Launch of Monetary and Economic Unification—Inherent Asymmetry
			2.2.1 Introductory Remarks
			2.2.2 Definition of the European EMU
				The Monetary Union
				The Economic Union
			2.2.3 Definition of EMU Law
		2.3 Primary EU Law as a Source of EMU Law
			2.3.1 General Overview
			2.3.2 The Provisions of the TEU
			2.3.3 The Provisions of the TFEU
				Fundamental Articles
				The Main Corpus of the TFEU on the EMU and the ECB
				Other Articles
			2.3.4 Protocols and Declarations
				The Protocol on the Statute of the ESCB and of the ECB
					Structure
					Procedures for Amendment
				Other Protocols
				Declarations
		2.4 Legal Acts of Secondary European Law as Sources of the EMU Law—Intergovernmental Agreements
			2.4.1 General Overview
			2.4.2 The ‘Complementary Legislation’ of the Council
			2.4.3 Other Legal Acts of Secondary European Law
				Legal Acts by Virtue of the TEC
				Legal Acts by Virtue of the TFEU
			2.4.4 Intergovernmental Agreements as ‘Children’ of the Ongoing Fiscal Crisis in the Euro Area
		Secondary Sources
	Chapter 3: The Establishment of the European System of Financial Supervision
		3.1 The EU Treaties’ Provisions on Financial Stability: Introductory Overview
			3.1.1 The Conditions Before the Maastricht Treaty
			3.1.2 The Conditions After the Maastricht Treaty and Before the Lisbon Treaty
				Initial Remarks
				In Particular: The General Clause of Article 105(5) TEC
					Introductory Remarks
				Instruments for Implementation of the ESCB Task
					The (No Material) Impact of the Lisbon Treaty
		3.2 The Evolution of EU Banking Law Before the Establishment of the Banking Union: A Brief Overview
			3.2.1 Introductory Remarks
			3.2.2 The First and the Second Periods
			3.2.3 The Third Period: The Period of Consolidation of the Single Financial Area (1999–2007)
				Institutional Developments
					Adoption of the ‘Lamfalussy Process’
					Extension of the Lamfalussy Process to European Banking and Insurance Law
				Regulatory Developments: The Two Benchmark Initiatives
					The 1999 ‘Financial Services Action Plan’
					The 2005 White Paper ‘Financial Services Policy 2005–2010’
			3.2.4 The (Current) Fourth Period
		3.3 The Establishment of the European System of Financial Supervision as a ‘Child’ of the Recent (2007–2009) International Financial Crisis
			3.3.1 The De Larosière Report as the Basis for Establishing the ESFS
			3.3.2 The European Supervisory Authorities as the First Pillar of the ESFS
			3.3.3 The European Systemic Risk Board as the Second Pillar of the ESFS
			3.3.4 The Legal Basis of the Regulations on the ESFS
		3.4 A General Remark on the Importance of Robust Institutions and Policies
		Secondary Sources
	Chapter 4: The Establishment of the (European) Banking Union
		4.1 The Birth of the Banking Union as a Response to the Ongoing Fiscal Crisis in the Euro Area
			4.1.1 The Political Decisions of June 2012 and the Commission’s Initiatives
			4.1.2 Legislative Actions—The New Institutional and Regulatory Framework
				The First Wave of Measures
				The Commission’s Most Recent Reform Agenda: A General Overview
				In Particular: Increasing the Quality of Supervision
		4.2 The First Main Pillar: Authorisation, Prudential Regulation and Prudential Supervision of Credit Institutions
			4.2.1 The Legal Acts Governing the SSM
			4.2.2 The Single Rulebook
				General Overview
				The Impact of Public International Banking Law
				Adoption of the 2016 ‘Banking Package’
			4.2.3 The Relationship Between the SSMR and the Single Rulebook
		4.3 The Second Main Pillar: Resolution of Credit Institutions
			4.3.1 The SRM and the SRF
			4.3.2 The Single Rulebook
				General Overview
				The Impact of Public International Banking Law
			4.3.3 Recent Modifications and Pending Amendments
				The Impact of the 2016 ‘Banking Package’ on the SRMR and the BRRD
				Towards a ‘Common Backstop’ to the (Single Resolution) Board for the SRF
					An Overview
					In Particular: The Direct Recapitalisation Instrument
			4.3.4 The Relationship Between the SRMR and the Single Rulebook
		4.4 The (Still Pending) Third Main Pillar: Deposit Guarantee
			4.4.1 The (Single) European Deposit Insurance Scheme
				An Overview on the Basis of the Commission’s 2015 Proposal for a Regulation
				Current Developments
			4.4.2 The Single Rulebook
				General Overview
				The Impact of Public International Banking Law
		Secondary Sources
	Part II: Institutional Architecture
	Chapter 5: The Systems and Mechanisms of the European Central Bank and National Central Banks
		5.1 The European System of Central Banks and the Eurosystem
			5.1.1 General Overview
				Composition and Legal Nature of the European System of Central Banks (ESCB) and of the Eurosystem
				Objectives and Tasks of the ESCB
				Financial Provisions of the ESCB
			5.1.2 The NCBs Within the ESCB and the Eurosystem
				NCBs of Member States Whose Currency Is the Euro
					NCBs as an Integral Part of the ESCB
					Relationship Between the ECB and NCBs: The Principle of Decentralisation—Power to Act Independently
					Independence of the Governors of NCBs—Liability of NCBs
				NCBs of Member States with a Derogation
					Introductory Remarks and Individual Derogations
					The Position Within the ESCB
		5.2 The Single Supervisory Mechanism
			5.2.1 Objective and Field of Application of the SSM Regulation
			5.2.2 Article 127(6) TFEU as the Legal Basis of the SSM Regulation
			5.2.3 The Two Components of the SSM
				Introductory Remarks
				The ECB as the Main Actor
				The NCAs Within the SSM
			5.2.4 Key Elements of the SSM Under the SSM Regulation
			5.2.5 The ‘Close Cooperation’ Between the ECB and the NCAs of Member States with a Derogation
		5.3 The Single Resolution Mechanism
			5.3.1 Objective and Field of Application of the SRM Regulation
			5.3.2 The Two Components of the SRM
				The SRB and the Role of the ECB
				The Role of NRAs
				Transfer of Resolution Powers and Responsibilities to the Board
			5.3.3 Other Aspects of Relevance to the ECB
				Cooperation Arrangements
					Obligation to Cooperate and Information Exchange Within the SRM
				Consultation of, and Cooperation with, Non-participating Member States and Third Countries
				Investigatory Powers—Requests for Information—Professional Secrecy and Exchange of Information
		5.4 The Two Components of the European System of Financial Supervision
			5.4.1 The European Banking Authority
				Legal Status, Objective, Organs and Scope of Action
				Tasks and Powers
					The Structure of Chapter II of the EBA Regulation
					EBA’s Tasks According to Article 8(1) EBA Regulation
					EBA’s Powers Under Article 8(2) EBA Regulation
				Contribution to the Protection of Consumers of Financial Services
				Integration Within the EU Institutional Framework
					Introductory Remarks
					Independence
					Accountability
				Appeals—Judicial Review of the Decisions of the EBA
			5.4.2 The European Systemic Risk Board
				Legal Status, Objective and Organs
					Tasks and Powers
			5.4.3 In Particular: The SSM as Part of the ESFS
		Appendix: The Role of the EBA in the Making of European Banking (and, in General, Financial) Law
			The TFEU Provisions: Legal and Soft Law Instruments
			Legislative Acts (Article 289 TFEU)
			Delegated Acts (Article 290 TFEU) and ‘Regulatory Technical Standards’
			Implementing Acts (Article 291 TFEU) and ‘Implementing Technical Standards’
			Guidelines and Recommendations
		Secondary Sources
	Chapter 6: Institutional Aspects of the European Central Bank
		6.1 General Overview
			6.1.1 Introductory Remarks
			6.1.2 Legal Personality—Seat—Privileges and Immunities
		6.2 The Bodies of the ECB
			6.2.1 The Decision-Making Bodies
				Introductory Remarks
				The Governing Council
				The Executive Board
				The General Council
			6.2.2 The Internal Bodies Established by the SSMR
				The Supervisory Board
				The Administrative Board of Review
				The Mediation Panel
		6.3 Regulatory and Sanctioning Powers
			6.3.1 Regulatory Powers
				Powers Under the TFEU and the ESCB/ECB Statute
					Categories of ECB Legal Instruments
					Legal Instruments by Virtue of the TFEU
					Legal Instruments by Virtue of the ESCB/ECB Statute
				Regulatory Powers Under the SSMR
					The Substantive Framework
				Due Process for Adopting Supervisory Decisions—Supervisory Procedures
				Right to Be Heard and Right of Access to the ECB’s Files
				ECB Supervisory Decisions
			6.3.2 Sanctioning Powers
				An Overview of the Legal Framework
				Breach of Regulatory Requirements Under EU Banking Law
					Penalties Imposed by the ECB Under Article 18(1) SSMR
				Cooperation Between the ECB and NCAs
				Breach of ECB Legal Acts
				Specific Provisions
		6.4 Independence, Accountability and Transparency
			6.4.1 Independence
				The Provisions of the TFEU
					Institutional Independence
					Operational Independence
					Personal Independence of the Members of the ECB Executive Board
					Financial Independence: ECB’s Capital
				The Provisions of the SSMR
					Introductory Remarks
					Institutional Independence
					Financial Independence
			6.4.2 Accountability and Transparency
				The Provisions of the TFEU and the ESCB/ECB Statute
					TFEU Provisions
					ESCB/ECB Statute Provisions
				The Provisions of the SSMR
					Accountability vis-à-vis EU Institutions
				Accountability vis-à-vis National Parliaments
		6.5 Other Institutional Aspects
			6.5.1 Communication of the ECB with Other EU Institutions
			6.5.2 Judicial Control—Liability Issues
		Secondary Sources
	Part III: Tasks and Competences of the European Central Bank
	Chapter 7: The Basic Tasks of the European Central Bank Within the Eurosystem and Issuance of Banknotes and Coins
		7.1 Definition and Implementation of the Single Monetary Policy
			7.1.1 Definition of Monetary Policy
				Introductory Remarks
				The First Pillar
				The Second Pillar
			7.1.2 Implementation of Monetary Policy
				General Remarks
					Historical Overview
					The Applicable Framework
				Instruments for the Implementation of Monetary Policy
					Open Market Operations
				Standing Facilities
					Minimum Reserves
					Eligible Counterparties
					Assets Eligible as Collateral in the Eurosystem
			7.1.3 In Particular: Implementation of ECB Monetary Policy Following the Recent (2007–2009) International Financial Crisis and the Ongoing Fiscal Crisis in the Euro Area
				Introductory Remarks
				The ECB Asset Purchase Programmes
			7.1.4 Introduction of the Euro Short-term Rate
		7.2 The Other Basic Tasks of the ECB Within the Eurosystem
			7.2.1 Exchange-rate Policy
				Introductory Remarks
				Participation of the Euro in an International System of Fixed or Managed Floating Exchange Rates
					Conclusion of Formal Agreements on the Participation of the Euro in an International System of Fixed or Managed Floating Exchange Rates
					Adoption, Adjustment or Abandonment of the Central Rates of the Euro Within the International Exchange Rate System
					The Single Exchange-rate Policy in the Context of an International System of Freely Floating Exchange Rates
				Member States’ Negotiating Power
			7.2.2 Holding and Management of Foreign Reserve Assets
				Transfer of Foreign Reserve Assets to the ECB
				Holding of Foreign Reserve Assets by NCBs
			7.2.3 Promotion of the Smooth Functioning of Payment Systems
				General Overview
				A Brief Overview of Regulation ECB/2014/28 of 3 July 2014 on Oversight Requirements for Systemically Important Payment Systems
			7.2.4 In Particular: The TARGET2 Payment System and the TARGET2-Securities System
				The Migration from the Initial TARGET Payment System to the TARGET2 Payment System
					The Initial TARGET Payment System
				The Need to Amend TARGET and Migration to TARGET2
				The TARGET2-Securities System for Securities Settlement in Central Bank Money
				The TARGET2 System
					Scope and Transactions—Types of Payments
					Types of Participants—Suspension or Termination of Participation
					Key Aspects Relating to the Operation of the TARGET2
		7.3 Powers of the ECB in Relation to the Issuance of Banknotes and Coins
			7.3.1 An Overview of the Legal Framework
			7.3.2 Banknotes
				Primary Law Provisions: Authorisation of Banknote Issue, Issue of Banknotes and Banknote Features
				Secondary Law Provisions
					Global Overview
					Denomination and Technical Specifications
					Reproduction, Exchange of Damaged Genuine and Withdrawal of Euro Banknotes
					Allocation of Banknotes
					Obligations of Banknote Issuers
			7.3.3 Coins
				Primary Law Provisions
				Secondary Law Provisions
		Secondary Sources
	Chapter 8: The Specific Supervisory Tasks of the European Central Bank and Its Cooperation with National Competent Authorities
		8.1 The Specific (Supervisory) Tasks Conferred on the European Central Bank
			8.1.1 Introductory Remarks
				Specific Supervisory Tasks in Relation to Credit Institutions and Other Supervised Entities Incorporated in Participating Member States
					Specific Supervisory Tasks in Relation to Branches in Participating Member States by Credit Institutions Incorporated in Non-participating Member States
			8.1.2 The Specific Tasks Under Article 4(1) SSMR
				Granting and Withdrawal of Authorisation
					Introductory Remarks
					Granting of Authorisation
					Withdrawal of Authorisation
					Cross-Border Issues
				Acquisition and Disposal of ‘Qualifying Holdings’
					Ensuring Compliance with Micro-prudential Regulations
					Conduct of Supervisory Reviews and Imposition of Ad Hoc Additional Requirements
					Micro-prudential Supervision of Banking Groups on a Consolidated Basis
				Supplementary Supervision of Financial Conglomerates 
					Specific Supervisory Tasks in Relation to Recovery Plans and Early Intervention
			8.1.3 The Specific Tasks Under Article 5 SSMR
				Introductory Remarks
				Use of Macro-prudential Tools by National Authorities
				Use of Macro-prudential Tools by the ECB
		8.2 Cooperation Between the ECB and National Competent Authorities Within the SSM
			8.2.1 General Principles and Obligations on the Operation of the SSM
			8.2.2 The Dichotomy Between Significant and Less Significant Supervised Entities
				General Provisions on the Classification of a Supervised Entity as Significant or Less Significant
					Classification on an Individual and on a Group Basis: General Overview
					Specific Provisions
				The Criteria for Classifying Supervised Entities as Significant
					General Overview
					The Size Criterion
					The Economic Importance Criterion
					The Cross-border Activities Criterion
					The Direct Public Financial Assistance Criterion
					The Supervised Entity Is One of the Three Most Significant Credit Institutions in a Participating Member State
				The 2017 Judgment of the European Court of Justice
				The Procedure for Classifying Supervised Entities as Significant
					Classifying a Supervised Entity as Significant
					Beginning and End of Direct Supervision by the ECB
					Pending Procedures
			8.2.3 Micro-prudential Supervision of Significant Supervised Entities and Groups
				General Provisions
					Joint Supervisory Teams: Composition and Tasks
					JST Coordinator and Sub-coordinators
				Procedures for Micro-prudential Supervision
					Micro-prudential Supervision and Assistance by NCAs
					Exchange of Information
					Compliance with Fit-and-Proper Requirements for Managers
			8.2.4 Micro-prudential Supervision of Less Significant Supervised Entities and Groups
				Powers of the ECB
					General Provisions
					In Particular: The Provisions of Article 6(5), Point (b) SSMR
					Responsibilities of NCAs
					Procedures for Micro-prudential Supervision
		Secondary Sources
	Chapter 9: Other Specific Tasks and Competences of the European Central Bank Relating to Financial Stability
		9.1 The Specific Tasks of the European Central Bank in the Context of the European Systemic Risk Board
			9.1.1 Introductory Remarks
			9.1.2 In Particular: Mission and Management of the ESRB’s Secretariat—Collection and Confidentiality of Information
		9.2 Competences of the ECB Within the Single Resolution Mechanism
			9.2.1 Resolution Planning
			9.2.2 Early Intervention
			9.2.3 The Conditions for Resolution within the Resolution Procedure
				Introductory Remarks
				The ‘Failing or Likely-to-Fail’ Criterion
					The Rule
					The Three Forms of Provision of Extraordinary Public Financial Support Which Do Not Activate the Resolution Regime
					The Second Criterion
					The ‘Public Interest’ Criterion
						Recent Decisions of the Board on the Basis of Determinations Made by the ECB
			9.2.4 Write-Down and Conversion of Relevant Capital Instruments
		9.3 Last-Resort Lending—The (Still) Limited Role of the ECB in the ELA Mechanism
			9.3.1 Introductory Remarks
				Last-Resort Lending by Central Banks as a Liquidity Crisis Management Measure
					Definition, Functions and Delimitation
					Principles Governing the Implementation of Last-Resort Lending
				The Euro Area Framework—Documentation on the ELA Mechanism
			9.3.2 The Content of the ECB Agreement (2017): A Detailed Presentation
				General Aspects
					Scope of Application—Definition of the Term ‘Emergency Liquidity Assistance’
				Allocation of Responsibilities, Costs and Risks
				Situations Where ELA May Be Limited or Prohibited
					The ELA Solvency Criterion for Credit Institutions
					Duration and Pricing of ELA
				Flow of Information, Control of Liquidity Effects and Monetary Policy
					The Main Framework
				Size of ELA Operations Exceeding Specific Thresholds
				Specific Cases
				Communication on ELA
		Secondary Sources
	Part IV: Conclusion
	Chapter 10: Concluding Remarks
		10.1 On the Evolution of European Central Banking Law
		10.2 On the Institutional Aspects of the Systems and Mechanisms of the European Central Bank and NCB
			10.2.1 The ESCB and the Eurosystem
				General Remarks
				The Role of the NCBs
			10.2.2 The Two Main Pillars of the BU
				The Single Supervisory Mechanism (SSM)
				The Single Resolution Mechanism (SRM)
			10.2.3 The ESFS
				The EBA
				The European Systemic Risk Board
				In Particular: The SSM as Part of the ESFS
		10.3 On the Institutional Aspects of the ECB
			10.3.1 The Bodies
			10.3.2 Regulatory Powers
			10.3.3 Sanctioning Powers
			10.3.4 Independence
			10.3.5 Accountability and Transparency
			10.3.6 Communication of the ECB with Other EU Institutions: Judicial Control—Liability Issues
		10.4 On the Tasks and Powers of the ECB and the NCBs
			10.4.1 A Classification of the ECB’s Tasks: Division of Objectives and Allocation of Tasks of the ECB, the EBA and the ESRB
			10.4.2 Definition and Implementation of the Single Monetary Policy
			10.4.3 The Other Basic Tasks
			10.4.4 Powers of the ECB in Relation to the Issuance of Banknotes and Coins
			10.4.5 The Specific (Supervisory) Tasks of the ECB and Its Cooperation with NCAs in the Context of the SSM
			10.4.6 Other Specific Tasks and Competences Relating to Financial Stability
				The Specific Tasks of the ECB in the Context of the ESRB
				ECB Competences within the SRM
				The Role of the ECB in the ELA Mechanism
	Chapter 11: Assessments and Proposals
		11.1 Assessments Relating to the EMU and the Role of the European Central Bank as Monetary and Banking Supervisory Authority
			11.1.1 The Basic Tasks of the ECB Within the Eurosystem and Institutional Aspects Governing Its Operation
			11.1.2 The Link Between a More Robust EMU and a Well-functioning and Financial Stability-enhancing BU
			11.1.3 The ECB as Monetary and Banking Supervisory Authority
		11.2 The Partial Europeanisation of the Bank Safety Net and Proposals for Improvement
			11.2.1 Introductory Remarks
			11.2.2 Towards a Revision of the Existing ELA Mechanism
				Differentiation According to the Significance of Credit Institutions
				The Advisability for the ECB to Act as Lender of Last Resort for Significant Credit Institutions
				The Feasibility of the ECB Becoming a Lender of Last Resort for Significant Credit Institutions
			11.2.3 Liquidity in Resolution: A Potential Enhanced Role for the ECB
				The Issue at Stake
				Alternative Public Sector Backstop Funding Mechanisms for the Euro Area
		Secondary Sources
	General Secondary Sources
	Index