Abstract
This chapter studies the European Banking Authority (EBA), a decentralized agency tasked with specific microprudential responsibilities in the EU banking sector. By examining the EBA’s institutional and legal background, the chapter first explains the paradigm shift from coordination to centralization in governance and, consequently, the transition from committees to agencies. It then proceeds with the analysis of EBA’s internal governance framework, drawing evidence from founding acts, official documents and policy papers. Special consideration is given to criticism related to the political neutrality of EBA’s executive organs, where national interests were found to dominate. In this regard, the chapter determines whether EBA is indeed subject to “power struggles” and, if so, how they are mitigated and precluded from influencing policy outcomes.
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Notes
- 1.
All three ESAs were established under Art. 114, a legislative choice backed by the Court of Justice ruling in Case C-217/04.
- 2.
Building upon the legislative framework set by the European Commission, the Single Rulebook establishes the common regulatory infrastructure equally applicable to banks across the EU, therefore levelling the single market for its participants (European Banking Authority 2016, p. 5).
- 3.
The “emergency” nature of circumstances has to be formally recognized by the Council in consultation with other stakeholders (among others, the European Commission) (EBA Regulation, Art. 18(2)).
- 4.
The Parliament’s role is somewhat reversed in the process of removal from office of the Chairperson and Director. The Chairperson cannot be removed from duty without the Parliament’s confirmation, while the removal of the Director is subject exclusively to the decision of the Board of Supervisors (EBA Regulation, Art. 48(5), 51(5)).
- 5.
Both the multi-annual and the annual work programme have to be transmitted to the EU’s main political institutions (Parliament, Council and Commission) as information, after which they have to be made public.
- 6.
Many Western European countries are represented by supervisory authorities other than central banks (for instance Austria, Denmark, Germany, France and others). Over the years they conformed to the trend of institutional consolidation in financial supervision, therefore de-coupling monetary and supervisory policy in central banking, and delegating oversight competencies to a specialized institution in the banking sector. For more information on the structure of financial supervision in Europe, and the trend of single supervisor, see Wymeersch, E. (2007). The Structure of Financial Supervision in Europe: About Single Financial Supervisors, Twin Peaks and Multiple Financial Supervisors. European Business Organization Law Review, 8(2), pp. 237–306.
- 7.
Looking at MS representation within the Management Board over the years, the assumption on “partiality” gains ground—namely, from the EBA’s establishment countries from the Central and Southeast European region are underrepresented.
- 8.
For instance, the International Monetary Fund has also expressed concerns regarding EBA’s internal governance, and the composition of its executive organs, as well as coordination of national actors therein. See International Monetary Fund (2013) European Union: Publication of Financial Sector Assessment Program Documentation—Technical Note on Issues in Transparency and Accountability, IMF Country Report No. 13/65, Washington DC.
- 9.
In this spirit, the findings of three European Commission consultations suggest that NCAs would be in favour of replacing the Management Board with an Executive Board composed of experts not affiliated to national authorities, which would introduce operational improvement but also enhance MS’ equality. For a detailed review of potential areas and mechanisms of improvement of EBA’s internal governance, see European Parliament (2013) Review of the New European System of Financial Supervision (ESFS) Pt. 1: The work of the European Supervisory Authorities (EBA, EIOPA and ESMA), IP/A/ECON/ST/2012-23.
- 10.
A quorum is required for voting validity—it is made up of two-thirds of the members with the right to vote. Looking at the current number of members, it is easy to see that Euro area countries alone meet this requirement. If a quorum is not met, the Chairperson may convene an “extraordinary meeting” at which a decision may be taken even without the quorum (Art. 3.3. of the EBA/DC/2011/001 (Rev 4)).
- 11.
At the time of writing, EBA has never resorted to temporary prohibitions or restrictions of market activities (see also European Parliament 2013, p. 33).
- 12.
In 2014 an additional “check” was provided related to the adoption of regulatory and implementing technical standards, re-defining qualified majority voting as “double qualified majority”, meaning that a decision was adopted if at least 55% of voting members were in favour, comprising at least 15 of them and coming from NCAs from countries representing at least 65% of the Union’s population (Art. 3.10. of the EBA/DC/2011/001 (Rev 04)).
- 13.
Minutes of Board of Supervisors and Management Board meetings can be retrieved from http://www.eba.europa.eu/about-us/organisation/board-of-supervisors/meetings-and-minutes, and from http://www.eba.europa.eu/about-us/organisation/management-board/meetings-and-minutes, respectively.
- 14.
For detailed insight on the so-called “double hatted” manner in which national regulatory authorities operate as constituents of an European agency, see Egeberg, M., Trondal, J. (2009) ‘National agencies in the European administrative space: government-driven, Commission-driven or networked?’, Public Administration, 87(4), pp. 779–790.
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Božina Beroš, M. (2018). The European Banking Authority. In: Agencies in European Banking. Palgrave Macmillan Studies in Banking and Financial Institutions. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-78689-6_3
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