The Interplay between the ECB and NCAS in the 'Common Procedures' Under the SSM Regulation: Are There Gaps in Legal Protection?

Abstract

“Common procedures” represent interesting cases to understand the legal implications of entrusting banking supervisory tasks to a “single mechanism”, that is a complex system composed of the ECB, a European Institution, and NCA that all play a part in a multi-stage process to carry out a public function. The paper concludes that “common procedures” should be interpreted as only one proceeding composed of various stages; the first ends with an act from the NCA which is non-binding on the ECB’s final decision. Therefore, the NCA’s proposal is a “preparatory act” that cannot be appealed before national courts. Only the final decision of the ECB can be appealed before the CJEU. This conclusion does not limit the right of defence of a person affected by a supervisory decision within the SSM. Indeed, any substantial legal flaw in the NCA’s assessment becomes a flaw of the ECB’s final decision whenever the ECB takes over the assessment of the NCA. Furthermore, the paper applying some principles established by the Court of Justice, concludes that the interplay between the NCAs and the ECB within the SSM regulation does not give rise to gaps in legal protection even in the case of a procedural legal flaw in the NCA’s phase of the procedure because the EU courts have jurisdiction to rule on the legality of the national stage of the proceeding.