Abstract

Vertical Revocations

On a new Phenomenon of the European Composite Administration of Banking Supervision

This paper proposes that vertical revocations are a new phenomenon of the European Composite Administration of banking supervision.

Under Regulation (EU) No 1024/2013 (SSM Regulation), direct supervisory competences in respect of supervised entities, in particular credit institutions, are split between the ECB and the national competent authorities (NCAs) of participating Member States. In general, the ECB has direct supervisory competence in respect of significant supervised entities while the NCAs are responsible for directly supervising the entities that are less significant. If the classification of an entity as significant/less significant changes, a change in competence between the ECB and an NCA also takes place. Following such a change in competence, vertical revocations become feasible, as the NCA may revoke ECB supervisory decisions (bottom-up revocation) and similarly the ECB may revoke supervisory decisions of the NCA (top-down revocation) regarding the entity in question. Top-down revocations by the ECB must comply with the general principle of revocability whereas bottom-up revocations by the NCA must comply with national administrative procedural law. The ECB revokes by decisions made in accordance with Article 288 TFEU, which are subject to review by the CJEU. NCAs revoke in accordance with the measures provided by their national law, which are subject to review by the national courts.