Conference: The Banking Union and the Creation of Duties - Department of Law, Robert Schuman Centre for Advanced Studies, European University Institute By: Prof. Dr. Florian Möslein, Dipl.-Kfm., LL.M. (London)

1. Horizontal Effects of the European
Banking Union
The Banking Union and the Creation of
Duties
EUI, 19-20 March 2015
Prof. Dr. Florian Möslein, Dipl.-Kfm., LL.M. (London)

2. Horizontal Effects in EU Law:
Basics
EU Institution
Private actors Third – private – parties
(Financial institutions) (clients, creditors,…)
What kind of effects?
• Contractual sanctions in case of breach
• Standing to bring actions of annulment
• State liability, namely Supervisory liability (method of private
enforcement of EU law)
Which legal acts?
• Regulatory level: Regulations and Directives, but also EBA/ECB
Standards and Guidelines
• Supervisory level: (Specific) Instructions and Decisions

3. Horizontal Effects in EU Law
ECJ Case Law on Banking Supervision
Case C-222/02 Peter Paul (12 October 2004)
• Obligation to revoke authorisation according to Deposit Guarantee
Directive
• Right to claim damages in case of breach?
• National Rule limiting Supervisory Liability. ECJ (+)
• Arg: Directive does not confer individual rights on depositors in the
event of defective supervision
Case C-604/11 Bankinter SA (30 May 2013)
• Standards of Business Conduct in MiFID Directive
• Private Law Sanctions in case of breach, namely: Nullity of
respective contract? ECJ (-)
• Arg: Member States may determine contractual consequences

4. General Architecture of the European Banking Union
SSM SRM
SDGSM?
ECB
(and National Authorities)
EBA‘s Single Rulebook
ECB‘s Regulations, Guidelines and
Recommendations

5. Policies and Regulations:
1. EBA’s Single Rulebook
Patchwork character, but some distinctive features relevant for HE:
(1) Protection of third parties forms integral part of EBA‘s mission
(2) Combination in one (comprehensive?) Single Rulebook
(3) Content: Prudential Rules – not Conduct of Business
Example: Bail-in tool for Recovery and Resolution of Banks
• Reduction/Conversion of Claims => Contractual Relationship
between Bank and Creditors
• Based either on Statutory Provisions or Contractual Arrangements
• Provisions of Directive not clear enough to produce HE
• But: CRR and Regulatory Technical Standards raise preciseness
=> HE due to comprehensiveness of Single Rulebook?

6. Policies and Regulations:
2. ECB’s Regulations, Guidelines, Recommendations
Similar content; ECB regulations binding and directly applicable (Art.
132 TFEU),
BUT:
(1) ECB much less focussed on third parties than EBA
(2) Less comprehensive approach than Single Rulebook => impact on
systematic, inter-instrumental interpretation of superordinated
rules
(3) Restricted territorial and substantive scope of ECB =>
Interpretation of uniform EU law differently with respect to
Eurozone/Non-Eurozone would foster fragmentation. Unlikely.

7. Supervisory Measures:
1. Instructions
• Two-level mode of supervision (functionally similar to Directives)
• Specific vs. general character of ECB instructions => different
degrees of discretion for National Authorities
Questions of Horizontal Effects:
(1) Standing of individuals to bring action for annulment (Art. 263)
> „direct and individual concern“?
> financial institutions, but only w/respect to specific instructions
> very problematic: competitors/customers
(2) Potential Liability of ECB?
> „true author“ of defective supervisory measure?
> depends on level of discretion of National Authority

8. Supervisory Measures:
2. Decisions
• Example: Civil liability for negligent supervision? Art. 340(3) TFEU
• Divergence of nation rules => no common principles
• Need to demonstrate that legal rules on which supervision was
based protect individual interests, not only public interest
• Interpretation of substantive EU rules, cf. Peter Paul
• (P) Application of national law by ECB acc. to Art. 4(3) SSM Reg.
=> What if national law generally provides for supervision in public
interest?
=> Adoption of National Regime vs. Transformation of single
substantive national provision to European, Reg. based rule.

9. Conclusion
• No general answer as to „Horizontal Effects of EBU“, but individual
assessment of substantive rules
• Van Gend en Loos: „to ascertain whether provisions extend so far
in their effects it is necessary to consider the spirit, the general
scheme, and the wording of those provisions“.
• Fragmented patchwork character of EBU‘s regulatory framework:
Two-fold at European level plus application of national laws
• Consequence: Complexity with Regard to Horizontal Effects

10. Thank you!
Prof. Dr. Florian Möslein, LL.M. (London)
Institut für Handels- und Wirtschaftsrecht
Philipps-Universität Marburg
e-mail: florian.moeslein@jura.uni-marburg.de