Judicial Protection for Natural Persons Sanctioned under the Single Supervisory Mechanism: Stuck in between Jurisdictions?

Abstract

This paper analyses the system of judicial protection for natural persons that are sanctioned under the system of banking supervision provided by the Single Supervisory Mechanism (SSM). As the imposition of sanctions on natural persons gains traction to ensure regulatory compliance, this study scrutinizes whether natural persons can effectively access judicial protection when sanctioned by national competent authorities (NCAs) on the request of the European Central Bank (ECB). The paper unveils the complexities of the SSM's sanctioning system. While the ECB exercises direct prudential supervision on significant banks (SIs), allowing it to ascertain whether a bank violated relevant Union law and subsequently impose administrative pecuniary penalties to the bank (SI-decision), it lacks the competence to directly impose an administrative penalty on the natural persons responsible. Instead, the ECB may require the NCAs (ECB-request) to impose appropriate penalties on the responsible natural person. Within this intricate system involving EU and national administrative procedures, the natural persons may get stuck between jurisdictions. Facts and legal questions relevant to the SI-decision adopted by the ECB in relation to the alleged breach of law conducted by the SI, subject to challenge before the EU Courts, can significantly impact the (national) sanction imposed on the natural persons. After all, they are sanctioned for that very same breach. In order to gain a complete picture of the possibilities for natural persons to gain judicial protection in this complex reality, the paper analyses the possibilities for the natural persons to gain judicial protection with respect to the sanction imposed by the NCA, the ECB-request, and the SI-decision.