The Approximation of National Banking Law in the European Banking Union

This chapter provides a critical analysis of the effectiveness of the Single Rulebook (SR) in its current form. This analysis entails investigating the role that the regulatory function of the European Banking Authority (EBA) and the centralisation of supervisory and crisis management powers within the European Banking Union (EBU) may have on the process of bringing national supervisory and regulatory frameworks into maximum harmonisation. The EBA and the integration mechanisms within the EBU act in concert to achieve this common and fundamental objective. However, since there is still a long way to go, some institutional changes might be useful to reduce national divergences by promoting the uniform implementation of the SR and its homogeneous application to banking intermediaries that benefit from the ‘single European passport’ (freedom of establishment and freedom to provide services). To set the scene, this chapter begins by outlining the legal basis of the EBU and the rationale for its creation (Section II). It then goes on to analyse the institutional weaknesses of the EBA, and the two pillars of the EBU - the Single Supervisory Mechanism (SSM) and the Single Resolution Mechanism (SRM) - involved in promoting the maximum harmonisation process (Section III and Section IV). The aim of this analysis is to underline that the EBA and the two EBU integration mechanisms may carry out their respective regulatory and unificatory functions to increase the effectiveness of the SR (Section V). The chapter concludes by laying out some potential institutional improvements that may assure broader consistency of national banking regulation, supervisory practices, and resolution procedures (Section VI).