December 01
2020

European Banking Union (2nd ed.)

Danny Busch and Guido Ferrarini (eds.)

review by

Dr Karl-Philipp Wojcik

Under the experienced editorship of Danny Busch and Guido Ferrarini, Oxford University Press has this year published the second edition of the research handbook ‘European Banking Union’. The editors presented the handbook’s first edition in 2015, very shortly after the legislative completion of the two first pillars of the Banking Union, namely the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM).

However, at that time both the ECB and the SRB had just barely started applying their new supervisory responsibilities and resolution tasks.

Since then, both the ECB and the SRB have developed an extensive and mature European administrative practice. This included the completion of the first resolution of a European bank (Banco Popular) under the Banking Union framework in 2017 as well as numerous supervisory decisions that tested the smooth functioning of the Banking Union’s composite system built on EU and national law.

On the legislative side, activities also continued: for instance, the European Commission proposed the European Deposit Insurance Scheme (EDIS) to complete the Banking Union with a third pillar (the legislative negotiations are still unfinished); the European Parliament and Council adopted the Banking Package (CRD V/CRR II, BRRD II/SRM II) and further risk reduction measures.

Last but not least, since 2015 the Court of Justice of the European Union has started to develop a novel branch of case law entirely dedicated to the newly created Banking Union framework, which has helped to answer some of the significant questions of one of the most complex institutional architectures in the EU.

To address these developments, the second edition carries out a thorough revision, expansion and update of its first edition.

Most notably, the editors have structured the second edition along the three-pillar-architecture of the Banking Union: Part I, which is dedicated to ‘General Aspects’, is followed by Part II on ‘Single Supervision and the CRD IV’, by Part III on ‘Single Resolution and the BRRD’ and by a new Part IV which exclusively focuses on the ‘European Deposit Insurance Scheme and Policy Perspectives’.

In line with the approach successfully tried and tested in its first edition, each part of the second-edition handbook includes contributions by highly reputed, international experts from academia as well as global legal and regulatory practice on topical institutional, legal and policy aspects related to the European Banking Union. The editors were able to retain most of the authors of the first edition and succeeded in bringing on board a number of new and renowned contributors.

The efforts to update and revise the first edition are considerable: Entire contributions have been adapted to reflect subsequent regulatory developments, also taking account of new and seminal CJEU case law such as the cases Landeskreditbank Baden-Württemberg – Förderbank v ECB (T-122/15 and C-450/17 P) or Berlusconi and Fininvest v Banca d’Italia (C-219/17).

Similarly, entirely new chapters were added: for instance, the new Part IV includes chapters on topics such as EDIS, Sovereign Exposures as part of the ongoing risk reduction debate and the role of financial conglomerates in the Banking Union – none of which figured in the first edition. Of particular interest is a new chapter analysing the various bank failures that had occurred over the past five years and in the transition to the Banking Union regime and how they were dealt with under the new framework, including the role of State Aid discipline. It links neatly with a new chapter analysing the EU framework on Non-Performing Exposures from a prudential, supervisory and State Aid perspective.

As the law is stated as of 1 May 2019, the book only marginally discusses the impacts of the Banking Package which was published in the Official Journal in June 2019. Neither does it reflect the ongoing discussions on ‘Liquidity in Resolution’ nor the debate on the Banking Union’s role in combating money laundering and terrorist financing. However, these desiderata do not weigh too heavily since they concern an area of law which is still quickly evolving and where some distance to the subject matter can actually be useful.

In conclusion, the handbook in its revised second edition provides a detailed and comprehensive state-of-the-art overview of the institutional, legal and policy implications of the European Banking Union. It includes a tables of cases and of legislation as well as a very detailed index, all of which are extremely practical and helpful for any reader. This second-edition-handbook continues to be a piece of reference and is highly recommended to anybody working, researching or simply being interested in the remarkable development of European integration that is the ‘European Banking Union’.

 

Dr Karl-Philipp Wojcik is a Member of the European Commission’s Legal Service. The views set out in this article are those of the author and do not necessarily reflect the official opinion of the European Commission.

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