Depicting the Limits to the SSM's Supervisory Powers: The Role of Constitutional Mandates and of Fundamental Rights’ Protection

Abstract

Given the complexity of the new supervisory architecture in the Euro zone, it seems necessary to provide a proper theoretical framework for the lawful exercise of both regulatory and supervisory tasks within the SSM. In this paper we endeavour to offer one such a framework. In particular, Section 2 provides an overview of the new institutional architecture of banking supervision within the SSM and a brief description of selected aspects of the SRM that directly interact with the SSM. Section 3 considers the limits to the SSM’s powers directly stemming from the SSM Regulation. Section 4 and 5 address the constitutional limits to the ECB powers; in particular, Section 4 discusses the limits deriving from the horizontal and vertical distribution of regulatory and supervisory competences within the SSM whereas Section 5 explores the coexistence of prudential and monetary Treaty’s mandates and its implications. Section 6 expands on fundamental right protection and its implications for the SSM. Section 7 concludes, showing that (a) the constitutional distribution of competences within the SSM is likely to be more ambiguous than necessary, (b) the relationship between prudential and monetary tasks described by the SSM Regulation seems to be quite questionable and (c) the SSM may raise important questions about the implications of the exercise of the supervisory tasks conferred upon the ECB and NCAs for the fundamental rights of the entities subject to supervision.

Keywords: European, Central, Bank, Banking Union, powers, mandates, stability, supervision, constitutional, fundamental, rights

JEL Classification: E58, G21, G38, G18, K10, K22