August 01
2021
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Effective Legal Protection in Banking Supervision

Laura Wissink

review by

Pablo Biscari

The setting up of the Single Supervisory Mechanism (the SSM) has brought a wide and extensive variety of legal questions and challenges which, as of today, have not yet been fully answered nor addressed by the European Union’s legislators or by its courts. We have only just begun to see legal issues being presented in the context of the banking union against the wider body of EU law and fundamental rights. One such challenge is ensuring that the ‘administered’ persons enjoy effective legal protection, a right which encompasses the right to be protected during the administrative phase of the procedure by adequate procedural guarantees as well as the right to seek judicial protection before courts. However, as of today and at EU level, given the absence of a positive body of EU administrative law and the difficulty of including an all-encompassing body of procedural safeguards in sectoral legislation, effective legal protection is mostly ensured on the basis of what the EU’s administration understands should be the practical application of the general principles of EU law.

In her latest publication, Effective Legal Protection in Banking Supervision (Europa Law Publishing, 2020), Laura Wissink takes up the challenge of carrying out a deep and thorough assessment of the novel legal questions that arise in respect of effective legal protection in banking supervision. The book is divided into three parts: the first part (chapters 1 to 3) introduces the reader to the topic, the context and the existing legal framework; the second part (chapters 4 to 7) analyses the SSM’s composite procedures and assesses how effective judicial protection is ensured in all ‘levels’ of decisions within the SSM, covering all sorts of top-down and bottom-up procedures, including investigatory and sanctioning procedures; and finally, the third part (chapters 8 and 9) presents the author’s conclusions by identifying potential issues and challenges and presenting different solutions to the current structure.

In the context of an area of law where the atomisation of regulation and the existence of multiple levels of administration might make it challenging for the unfamiliar practitioner to effectively grasp the workings of the SSM, the book offers a clear overview on the SSM’s institutional framework, the division of competences between European and national authorities and the administrative procedures put in place. With this detailed overview, the author provides the reader with an excellent basis to undertake the assessment of how and if effective judicial protection is guaranteed. This is precisely the purpose of Wissink’s analysis: to verify how effective legal protection is ensured in the context of the so-called common procedures in the SSM.

Wissink’s research approaches effective legal protection in banking supervision from two different perspectives: on the one hand, Wissink looks into whether the existing administrative procedures provide for sufficient procedural safeguards and guarantees so that fundamental rights of the interested parties are respected during the administrative phase of the procedure. This is not an easy task, as the participation of both EU and national-level administrations means that the applicable administrative standards and procedural laws may differ. Indeed, it is not always clear which of them should be applicable or prevail, or what administrative authority is responsible for compliance with such provisions. On the other hand, a more judicially-focused assessment is also carried out to ascertain which acts may be reviewed by EU or national courts, what standards of review are applied (or should be applied) and the challenges that arise during a Court’s review of a given act. In this regard, the assessment of the most relevant procedures in the SSM (including the ‘common procedures’) and the multiple challenges with which legal practitioners and administrations may be faced with is carried out in a very detailed and case-by-case manner, identifying potential ‘weakpoints’ of each procedure and proposing possible workarounds when available.

When carrying out the assessment, Wissink leverages an extensive body of EU jurisprudence relevant to the matter, including recent judgments of the Court of Justice in the context of the banking union (such as the Landeskreditbank, Berlusconi and Fininvest, Trasta Komercbanka, Crédit Mutuel Arkéa or the ABLV cases), to highlight the different issues that arise when reviewing acts of the ECB where national competent authorities have played an important role (the top-down procedures) and vice versa (the bottom-up procedures). As time has shown, the division of competences within the SSM entails a series of legal challenges for the different administrations and courts to address which may not always be easily resolvable with the existing legal framework. However, as proposed very well by the author in the final chapters, there are ways in which these challenges may be handled whilst awaiting legislative action. The use of the existing procedural rules of the Court of Justice to, for example, request national courts to provide information on points of law in order to assist the Court of Justice to review an act where national law is relevant is just one of the different solutions suggested. Particularly welcome is the author’s views on the need for a ‘reverse preliminary ruling’: a procedure where EU courts are able to consult national courts on points of national law which are relevant to an EU judicial process. Such proposals might very well help address the ‘gaps’ in legal protection that could arise in the context of the judicial review of administrative acts within the SSM.

Overall, Wissink’s research provides an excellent overview of the SSM’s institutional set-up and the legal challenges of this shared administration structure. As correctly stated by the author, these challenges are not an exclusive characteristic of the SSM; in fact, they are likely to be replicated in other areas of EU law where the model of shared administration has gained traction.

 

Pablo Biscari is a lawyer in the Private Equity and M&A department of an international law firm in Madrid. 

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