The Enforcement Dimension of EU Banking Regulations

SCHEME: OPEN

CALL: 2014

DOMAIN: LE - Law, Economics, Finance

FIRST NAME: Silvia

LAST NAME: Allegrezza

INDUSTRY PARTNERSHIP / PPP: No

INDUSTRY / PPP PARTNER:

HOST INSTITUTION: University of Luxembourg

KEYWORDS: enforcement; banking law; financial law; regulatory law; administrative sanctions; criminal law; fundamental rights; European law; financial crisis

START: 2015-04-01

END: 2018-03-31

WEBSITE: https://www.uni.lu

Submitted Abstract

The object of this project is to devise an overall and integrated enforcement system for the rules governing the banking system. Much emphasis is placed by the new Banking Union Regulation on the new role of supervision and enforcement given to the ECB, together with the ESMA and the EBA. However, banking and financial regulatory reforms address only partially the issue of enforcement. Regulation 2013/1024/EU establishes only a system of administrative supervision and enforcement but it leaves out, for instance, provisions concerning criminal law or judicial enforcement. As a result, the substantive law is to a large extent harmonised in the EU but the enforcement regime is still left to the Member States.The study will specifically focus on banking law: though the EU authorities intended to adopt an integrated approach on banking and financial regulation, specific measures are enacted for the banking field based on sectorial policy choices, which suggests to concentrate autonomously on this topic.In this light, the research project will first assess the applicable law in micro and macro prudential supervision both at European and national level, analysing the regulatory framework and the architectural design of relevant authorities. The project will define the obligations placed on the banking system and the best way for ensuring compliance with such obligations. It will address the following questions: To what extent is EU harmonisation needed to implement administrative law enforcement? Are their infringements a source of civil liability ? Are administrative sanctions a satisfactory tool to prevent harmful behaviours? To what extent do these behaviours need to be criminalised? Is it sufficient to strengthen the criminal law at the national level or would a certain degree of EU harmonisation be appropriate?The final goal is to provide an overall picture for an effective enforcement of banking regulations through legislative proposals directed in particular to the EU legislator and guidelines for regulators. A more coherent application of sanctions across the EU will contribute to a credible EU supervisory system, essential to maintaining the integrity and efficient functioning of the financial markets, where the danger of future systemic-risk catastrophes remain clear and present.

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