On the Scope and Limits of the Application of National Law by the European Central Bank within the Single Supervisory Mechanism

** ALSO SUBMITTED TO S04 AS PART OF A PANEL** Regulation 1024/2013 has established the Single Supervisory Mechanism (SSM) as a milestone towards the establishment of a full-fledged European Banking Union (EBU). This mechanism represents an unprecedented centralization in the area of financial market supervision in the internal market by shifting powers from national supervisory authorities to the ECB. In principle the ECB is in charge of direct supervision of significant credit institutions, whereas the competent national supervisors remain in charge of all other credit institutions. Yet, it can be observed as a rather peculiar feature of the SSM model that the ECB has the duty to carry out its tasks under EU law by directly applying national legislation. More specifically, Article 4(3) of the SSM Regulation compels the ECB to apply both national legislation implementing relevant EU Directives and, under certain circumstances, national rules exercising options granted by EU Regulations. This paper examines the application by the ECB of national rules in fulfilling its tasks under the SSM Regulation by focussing on a number of salient legal challenges posed by these novel regulatory arrangements. Firstly, the application of different national implementing rules by ECB will be examined. Here the analysis will focus on the difficulties a supranational authority such as the ECB may face in interpreting, applying and enforcing national rules of different Member States, as well as the implications this may have for the coherence of the European financial regulatory and supervisory system aimed at with the establishment of the EBU. Second, the challenges arising in terms of legal protection against ECB measures that are based on the application of national law are analysed. In particular, issues pertaining to access to justice as regards the competent court(s) and the law applicable to disputes involving the application of national legislation by ECB will be investigated.