Banking Union’s Accountability System in Practice. A Health Check-Up to Europe’s Financial Heart

Abstract

The Single Supervisory Mechanism (SSM) and Single Resolution Mechanism (SRM) are a recent, and remarkable, piece of institutional architecture that form the core of the Banking Union, which comprise national competent supervisory authorities (NCAs) and national resolution authorities (NRAs) combined with the role of an EU institution, the European Central Bank (ECB) and an EU agency, the Single Resolution Board (SRB). The vast array of powers by the two entities, the complexity of coordination, and the fact that decision-making over some of the more sensitive issues in financial policy has been allocated to the EU make accountability a key requisite for the system’s success. Some of the provisions applicable provide a solid foundation for a system of strong accountability. We find however that there may be room for some improvements to effectively counterbalance the powers given to the SSM and the SRB and to increase their accountability at the European level without undermining their independence and within the boundaries of the current legal framework.