Bulletin n. 1/2017
June 2017
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
  • Marco Lamandini, David Ramos and Javier Solana
    The European Central Bank (ECB) as a Catalyst for Change in EU Law, Part 1: The ECB's Mandate
    in Columbia Journal of European Law , volume 23, issue 1 ,  2016 ,  1-54
    The sovereign debt crisis in the Eurozone has evidenced the shortcomings offinancial supervision and regulation in the EU. In the summer of 2012, at the height of the crisis, and in the absence of a clear protector of financial stability in the Eurozone, it was the bold pledge of the President of the European Central Bank (ECB) to do "whatever it takes to preserve the euro" that managed to restrain contagion. But did the ECB really have the power to act as the safeguard of financial stability in the Eurozone? EU Policy makers have reacted to those shortcomings by introducing deeply transformative changes in financial regulation. The birth of the Banking Union might be the paramount example. In the institutional landscape arising from the Banking Union, the European Central Bank (ECB) stands as a central player, especially as the competent authority for the prudential supervision of the most significant credit institutions in the Eurozone. Yet the scope of its new powers as the guardian of financial stability is unclear. For example, in the event of another financial crisis, could the ECB provide financial assistance to credit institutions facing liquidity problems as a Lender ofLast Resort (LOLR)? In this paper, we look at the ECB's core mandates in the Treaties to delineate the scope of those new powers. Unlike monetary policy, financial stability is not a core mandate of the ECB under the TFEU. We begin by exploring whether the ECB could perform LOLR functions within its core mandates; particularly, within its mandate of monetary policy. For that, we delve into the recent decision of the CJEU in Gauweiler and others v. Deutscher Bundestag and Bundesregierung, and propose aframework to define the scope of the ECB's monetary policy mandate. We then examine the prudential supervision powers conferred on the ECB under the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM), and explore the possible limitations arising from the distribution of competences at the vertical and horizontal levels. We conclude with an analysis of the limitations that may arise if the ECB's powers on prudential supervision were to clash with its monetary policy mandate.
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