Towards a meaningful prudential supervision dialogue in the euro area? A study of the interaction between the European Parliament and the European Central Bank in the single supervisory mechanism

Abstract

This working paper focuses on the accountability arrangements for the ECB in the framework of the EU's Banking Union. For this purpose, first of all an analytical framework for the purposes of evaluating the preconditions and instruments of accountability placed at the disposal of the European Parliament in the Single Supervisory Mechanism is set out. Thereafter the powers conferred on the European Parliament in the legal framework of the SSM to hold the Supervisory Board to account for the exercise of its duties are examined based on this framework. Notably, the paper highlights the lack of a clear yardstick against which to assess the ECB's performance in the area of banking supervision, as well as a gap in terms of the ability of the European Parliament to assign consequences to the ECB's conduct. Furthermore, the interaction between the European Parliament and the Supervisory Board of the ECB, as evidenced through the parliamentary hearings that have been held thus far, is examined. A qualitative analysis of these hearings notably highlights the topics covered in those hearings, as well as the attitude of the MEPs towards the institutional structure and accountability arrangements in the Banking Union. Finally, a number of concrete proposals for enhancing the role of the European Parliament as an accountability holder in the Banking Union are made.