October 28
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Whilst publications on European Central Banking Law have arguably been quite numerous following the establishment of the European Banking Union in 2012 especially, Christos Gortsos’ recent book undoubtedly stands out for a series of reasons, among which are its comprehensiveness, level of detail and efficient structure, and it will undoubtedly be of interest to both scholars and practitioners.

This book sets out to provide an overview of European Central Banking Law. In so doing, it considers the role played by the European Central Bank (ECB) both as the authority in charge of the European monetary policy and in its quality as banking supervisor. It also examines the ECB’s role in the resolution of credit institutions – which belongs primarily to the realm of competence of the Single Resolution Board, as well as the way in which it may act as lender of last resort. The interactions with National Central Banks (NCBs) – which, together with the ECB, form the European System of Central Banks (ESCB) – are duly considered.

This book is divided into four parts: the first is devoted to an introduction to European Central Banking Law; the second focuses on the institutional architecture as it currently exists; the third considers the tasks and the competences of the ECB; and the fourth provides a conclusion.

The first part starts with an introduction of the main features of monetary and financial systems generally and within the EU in particular (Chapter 1). As such, it presents the background for the in-depth analysis of the European legal and institutional framework in this area. For instance, the analysis of the tools of conventional and unconventional monetary policy (p. 11f) is most useful for the understanding of the recent legal disputes that have concerned the ECB’s actions between the German Federal Constitutional Court and the Court of Justice of the European Union. The presentation of the European Monetary and Financial law framework (p. 31f), which includes both information concerning the theoretical and the historical backgrounds, is most welcome. The second chapter (p. 63f) delves more in-depth into the origins and main characteristics of the ESCB and the Eurosystem – the ECB and the NCBs of euro area Member States. Some of the information provided is widely accessible, and will be largely known to those interested in the Economic and Monetary Union, but the specifics concerning the rules applicable to the E(S)CB and the amendment procedures are summarised in a particularly clear manner for instance. The inclusion of such a summary in a publication like the one proposed by Christos Gortsos was, in any event, unavoidable, and will provide a useful source to anyone who may need to acquire, or refresh, his or her knowledge of these issues. After this presentation of the ESCB, Christos Gortsos turns to the European System of Financial Supervision which has been significantly enhanced over the past decade (Chapter Three, p. 104f), and the following chapter (Chapter Four, p. 141f) is specifically devoted to the Banking Union. These two chapters also provide a particularly clear and useful overview of the main features and rules applicable, whilst touching upon some of the ongoing discussions, including those regarding the establishment of the third pillar of the Banking Union, the European Deposit Insurance Scheme (EDIS).

Chapter Five (p. 185f) marks the beginning of the second part of this book which is devoted to the institutional architecture specifically. In this  chapter, the systems and mechanisms of the ECB and NCBs are considered. The analysis includes both the ESCB and the Single Supervisory Mechanism (SSM), and provides a synthetic overview of their main characteristics, including the status of the NCBs and National Competent Authorities of non-participating Member States, a question which has recently become of ever growing importance owing to the fact that two non-euro area Member States (Bulgaria and Croatia) have availed themselves of the possibility open to States which have not (yet) adopted the common currency to become part of the Banking Union. It should be noted that the analysis provided is particularly comprehensive as it also regards the Single Resolution Mechanism and the ECB’s role within it, the European Banking Authority as well as the European Systemic Risk Board. Chapter Six (p. 244f) then considers the structure of the ECB itself, and offers a fine-grained analysis of the different bodies and organs that compose it. It is, in particular, noteworthy that in this chapter, like in other chapters, useful summarising tables are included, for instance on the ECB’s and National Competent Authorities to impose administrative penalties (p. 263).

The third and final substantive part of the book (p. 279f) focuses on the ECB’s tasks and competences. The first chapter of this third part (Chapter Seven, p. 281f) examines the definition and implementation of monetary policy and may thus, for example, be of particular use to anyone interested in understanding better the background to the ongoing review of its monetary strategy by the ECB (p. 281f), as well as the actions taken by the ECB in response to the Great Financial Crisis and the COVID-19 crisis (p. 297f). Chapter Eight (p. 330f) then turns specifically to the ECB’s role as banking supervisor and its relationship to National Competent Authorities, the importance and complexity of which was highlighted by recent European and German case law (Landeskreditbank and SSM cases, respectively). The final substantive chapter (Chapter Nine, p. 371f) examines the ECB’s other tasks and responsibilities in relation to financial stability, a concept which lacks a ‘generally accepted definition’ (p. 14) though. Here Christos Gortsos considers the ECB’s role in the European System Risk Board and, most importantly, its role in banking resolution, and in the provision of Emergency Liquidity Assistance (an issue which has also been subject to intensive discussions during the euro crisis and ever since).

The concluding part (p. 407f) is remarkably thorough, and the proposals and assessments contained in the last chapter (Chapter Eleven, p. 433f) are especially useful in providing food for thought to the reader. Against the background of the recent Weiss judgment by the Court of Karlsruhe for example, the author’s clear statement in favour of central bank independence and its reinforcement – he indeed notes that ‘…it should be stressed that the independence of the ECB and the NCBs – Member of the Eurosystem could be further (and substantially) enhanced if additional cooling-off requirements were to be established for the members of the GC [Governing Council] in relation to their involvement in national policy-making (both ex ante and ex post)’ (p. 434) – appears particularly relevant. Also the clear representation of the channels of transmission from a sovereign crisis to the banking system, and of the channels for the transmission of crises between the financial system, the real sector of the economy and macroeconomic policies (p. 435 and 436, respectively) are helpful with a view to understanding the effects of, and solutions to, the ongoing COVID-19 crisis. The discussion concerning a revision of the ELA mechanism (p. 441f) might also soon (re)gain even more importance too.

If any additional proof of the importance of a sound integrated banking system within the EU were still needed after the euro crisis, the ongoing COVID-19 crisis and the economic downturn it has already provoked have, once again, shown the urgency to strengthen and complete the European central banking law framework examined by Christos Gortsos in this book. As such, the systematic, well-structured and comprehensive overview of the particularly complex institutional and regulatory framework he offers represents a particularly helpful basis to acquire knowledge of these issues, and to conduct further reflections, as do the remarkably detailed bibliographic references included at the end of each of the chapters.


Diane Fromage is a Marie Skłodowska-Curie Individual Fellow at the Law School of Sciences Po Paris. 



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