EU: Monetary policy VIII Financial supervision

European leaders have scrambled heroically to sort out the financial mess. The same leaders are responsible for the rules which let the meltdown happen in the first place and the treaties which make it hard to solve the cross-border problems when they have erupted.

The most important financial institutions are increasingly global or European in scope, but the prudential supervision of credit institutions and the stability of the financial system has deliberately been left to the (in)competent national authorities.

This is the situation pursuant to the existing Article 105(5) of the Treaty establishing the European Community (TEC). It remains the case under the Lisbon Treaty, as you can see from Article 127(5) of the Treaty on the Functioning of the European Union (TFEU).

The obvious solution is banking supervision at European level, but it is as if we lived in medieval times, when every science was a servant to theology (ancilla theologiae). The European System of Central Banks is graciously allowed to assist: to contribute to the smooth conduct of supervisory policies at national level. Able or unable to prevent meltdown, national authorities call the tune although they lack the scope.

The Treaty of Lisbon brings no change to this. In other words, it would require a new treaty (amendment) to remedy the situation. As we have seen, the form (international treaty), decision-making (unanimous agreement) and national approval (ratification) by all member states have made treaty reform a ‘mission impossible’, The logic of international relations has also left the citizens of the European Union as hapless bystanders and spectators.

In addition, since the Nice Treaty there has constantly been a reform project blocking the tunnel, leaving no room for other treaty reforms (except the more technical accession treaties).

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With these ground rules, it is no wonder that the EU and EC treaties are hard to read and even harder to master. Treaty reform becomes endless tinkering between member states’ governments, instead of an open and democratic process. In the end, the treaties impose as many self-defeating restrictions on the union, as they grant powers to tackle common problems where the individual governments are out of their depth.

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Let us continue with our example.

Some people must have realised that European financial markets require pan-European supervision, but what came out of the treaty treaty-building sausage machine offered only the slimmest of hopes.

Substantially: Only limited (specific) tasks can be transferred to the European Central Bank. Putting in place a European regulator (or major reform) is impossible without reforming the treaty.

Insurance undertakings are wholly excluded from any attempts at supervision with global vision.

Procedurally: Even these limited tasks require unanimous decision by the Council, according to Article 105(6) TEC. The Lisbon Treaty is no help; Article 127(6) would still require unanimity in the Council, and the European Parliament would be downgraded from giving its assent to offering its opinion.

The Treaty of Lisbon takes a small step, but backwards, if seen from the angle of representative democracy.

Earlier we saw that the European Convention proposed the ordinary legislative procedure (European laws), but the tasks would have been as specific (limited) as before, and insurance undertakings as excluded as currently from any possible arrangement.

From a practical point of view, Article III-77(6) of the draft Constitution was more or less a theoretical improvement, perhaps a political signal of the awareness the limits of scattered supervision and multi-jurisdiction financial firms.

Even this degree of temerity was too much for the intergovernmental conference 2004, which clobbered the proposal and reinstated Council unanimity and downgraded the European Parliament to opinion-giver.

The IGC 2007 had practically no room for improvements on the 2004 Constitutional Treaty. On the contrary, the governments prepared the IGC 2007 Mandate with a view to what might be salvaged and what should be jettisoned by the Reform Treaty (as it was then called).

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What to do, when doing the right thing is impossible?

Paralysis or muddling through seem to be the options.

About the evolving opinions concerning multi-jurisdiction firms; the European Financial Services Roundtable (EFR), representing major financial and insurance companies, has argued that a more efficient and effective supervision of financial institutions is a key element to improving growth and integration of European financial markets. The appointment of a fully empowered lead supervisor for each financial institution is considered to be a realistic way to achieve this goal.

The EFR issued its third report ‘On the lead supervisor model and the future of financial supervision in the EU ─ Follow-up recommendation of the EFR’, where the arguments were taken further. The June 2005 report is available at:

http://www.efr.be/members/upload/news/22676EFRlsvfinal-June2005.pdf

The EFR pro­posed that the lead supervisor should be responsible for the prudential supervi­sion not only of branches in other EU member states, but also of fully owned (fully controlled) subsidiaries in other EU member states. Supervisors in member states, where systemically important branches and subsidiaries are located, should be taken adequately into account by their being represented in the “college of supervisors”, leading to dialogue between supervisors.

In order to avoid competitive distortions, the lead supervisor concept would have to be applied by all member states. To ensure this, a legislative basis – most probably an EU regulation (directly applicable in all member states) – would have to be creat­ed, said the EFR.

The national central bank corresponding to the nationality of the lead supervisor would be the responsible lender of last resort and would ultimately take the decision on whether to activate the function or not.

The EFR recommend a gradually converging model of deposit insurance schemes, aimed at levelling the playing field without imposing additional burdens on the financial industry.

The EFR presented its criteria to evaluate any supervisory structure (page 10).

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Slowly these (half-)measures seem to inch their way towards political and legislative decisions.


Ralf Grahn

EU: Monetary policy VII Lisbon Treaty comments

The previous post mentioned a few brief UK references to Article 127 of the Treaty on the Functioning of the European Union (TFEU). We now turn to legal materials: outside the Eurozone from Sweden, inside Euroland Finland, as well as some EU commentaries in book form, to see if the objectives and the basic tasks of the European System of Central Banks (ESCB) and the European Central Bank (ECB), or potential European level financial supervision have elicited comments.

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Lissabonfördraget (Sweden)

The consultation paper ’Lissabonfördraget’ was the first official Swedish description of the Lisbon Treaty amendments, and it is available at:

http://www.regeringen.se/content/1/c6/09/49/81/107aa077.pdf

It was followed by the Swedish government’s draft ratification bill ‘Lagrådsremiss – Lissabonfördraget’, published 29 May 2008:

http://www.regeringen.se/sb/d/5676/a/106277

The draft bill was given a green light by the Council on Legislation (Lagrådet):

http://www.lagradet.se/yttranden/Lissabonfordraget.pdf

The latest official government view, and now my standard reference for Sweden, is the ratification bill, with the Swedish parliament (Riksdagen) expected to decide on approval in late autumn, in November or even later in the year. Committee work has not even started. According to Europaportalen the latest estimate for a decision by the parliament (Riksdagen) is before Christmas. The ratification bill, Regeringens proposition 2007/08:168 Lissabonfördraget; 3 July 2008, is available at:

http://www.regeringen.se/content/1/c6/10/84/02/8c96cf3e.pdf

Economic and monetary policy (23.2 Ekonomisk och monetär politik) is mainly discussed on pages 180 to 185. The Swedish government briefly presents the objectives and the tasks of the European Central Bank on various pages of the bill according to Article 105 TFEU (ToL). The potential transfer of tasks pertaining to financial supervision is mentioned on page 185, in the context of amended decision-making procedures, where a certain weakening of the European Parliament’s position is acknowledged:

”Inom ramen för den monetära politiken får rådet i dag genom enhälligt beslut på förslag från kommissionen efter att ha hört Europeiska centralbanken och med Europaparlamentets samtycke tilldela Europeiska centralbanken särskilda uppgifter i samband med tillsynen över kreditinstitut och andra finansinstitut med undantag av försäkringsföretag. Genom Lissabonfördraget får Europeiska centralbanken genom förordningar som ska antas av rådet tilldelas dessa särskilda uppgifter. Rådet ska besluta med enhällighet efter att ha hört Europaparlamentet och Europeiska centralbanken (artikel 105.6 i EUF-fördraget). En viss försvagning sker här av Europaparlamentets inflytande i och med att dess samtycke ersätts med dess hörande.”

Sweden remains outside the Eurozone, despite the lack of an opt-out based on the treaties.

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Lissabonin sopimus (Finland)

Finland is one of 15 member states currently forming Euroland, or the Eurosystem, as the European Central Bank calls it.

The Finnish ratification bill, ‘Hallituksen esitys Eduskunnalle Euroopan unionista tehdyn sopimuksen ja Euroopan yhteisön perustamissopimuksen muuttamisesta tehdyn Lissabonin sopimuksen hyväksymisestä ja laiksi sen lainsäädännön alaan kuuluvien määräysten voimaansaattamisesta’ (HE 23/2008 vp), presents an overview of economic and monetary policy (Talous- ja rahapolitiikka) on pages 91 to 92.
An explanation of the chapter on monetary policy (Rahapolitiikka) and a description of Article 105 TFEU (ToL), renumbered Article 126 TFEU, follow on pages 210 to 211:

”Määräykset koskevat Euroopan keskuspankkijärjestelmän ja Euroopan keskuspankin perustehtäviä, niiden perussääntöä ja perussäännön tiettyjen osien muuttamista koskevia menettelyjä, Euroopan keskuspankin ja kansallisten keskuspankkien riippumattomuutta sekä Euroopan keskuspankin tehtäviensä suorittamiseksi tekemiä päätöksiä. Määräykset vastaavat EY-sopimuksen VII osaston 2 luvun määräyksiä, lukuun ottamatta tiettyjä päätöksentekomenettelyjä koskevia määräyksiä, uudeksi 245 a artiklaksi siirrettyjä määräyksiä Euroopan keskuspankkijärjestelmän kokoonpanosta ja Euroopan keskuspankin oikeushenkilöllisyydestä ja uudeksi 188 o artiklaksi siirrettyjä päätöksiä euroalueen ulkoisesta edustautumisesta. Lisäksi luvun loppuun on siirretty nykyisestä 4 luvusta tiettyjä määräyksiä toimenpiteistä, jotka ovat tarpeen otettaessa euro käyttöön yhteisenä rahana. Perustuslakisopimuksessa vastaavat määräykset on sisällytetty II luvun 2 jaksoon III-185–III-190 artiklaan.

105 artiklassa (uusi 127 artikla) määritellään Euroopan keskuspankkijärjestelmän tavoitteet ja tehtävät. Artiklan 6 kohtaa täsmennetään siten, että säädöstyypiksi, joka neuvostolla on käytössään sen päättäessä rahoituslaitosten valvontaa koskevien erityistehtävien antamisesta Euroopan keskuspankille, yksilöidään asetus. Lisäksi määräystä muutetaan siten, että Euroopan parlamentin puoltavan lausunnon sijasta riittää, että parlamenttia kuullaan ennen päätöksentekoa. Määräys vastaa perustuslakisopimuksen III-185 artiklaa.”

The Finnish ratification bill is available at:

http://www.finlex.fi/fi/esitykset/he/2008/20080023.pdf


The Swedish language version of the ratification bill ‘Regeringens proposition till Riksdagen med förslag om godkännande av Lissabonfördraget om ändring av fördraget om Europeiska unionen och fördraget om upprättandet av Europeiska gemenskapen och till lag om sättande i kraft av de bestämmelser i fördraget som hör till området för lagstiftningen’ (RP 23/2008 rd), offers the same general remarks on economic and monetary policy on pages 93 to 94. The detailed remarks, Article by Article, under ’Ekonomisk och monetär politik’ contain the same description of the chapter on monetary policy (Monetär politik) and of Article 105 TFEU (ToL), the future Article 127 TFEU as in Finnish, on page 213:

”Bestämmelserna gäller de primära uppgifterna för Europeiska centralbankssystemet och Europeiska centralbanken, förfaranden för ändring av deras stadga och vissa delar i stadgan, Europeiska centralbankens och de nationella centralbankernas oavhängighet samt beslut som Europeiska centralbanken fattar för att utföra sina uppgifter. Bestämmelserna motsvarar bestämmelserna i avdelning VII kapitel 2 i EG-fördraget, med undantag för vissa bestämmelser om beslutsförfaranden, bestämmelser om Europeiska centralbankssystemets sammansättning och Europeiska centralbankens status som juridisk person som överförts till ny artikel 245a och beslut om euroområdets yttre representation som överförts som ny artikel 188o. Till slutet av kapitlet har dessutom från nuvarande kapitel 4 överförts vissa bestämmelser om nödvändiga åtgärder när euron tas i bruk som gemensam valuta. Motsvarande bestämmelser ingår i kapitel II avsnitt 2 i artikel III-185–III-190 i det konstitutionella fördraget.

I artikel 105 (blivande artikel 127), definieras målen och uppgifterna för Europeiska centralbankssystemet. Artikel 105.6 preciseras så att den rättsaktstyp som rådet kan använda vid beslut om att tilldela Europeiska centralbanken särskilda uppgifter i samband med tillsynen över kreditinstitut och andra finansinstitut individualiseras som förordning. Bestämmelsen ändras dessutom så att i stället för ett samtycke från Europaparlamentet räcker det med att parlamentet hörs före beslutsfattandet. Bestämmelsen motsvarar artikel III-185 i det konstitutionella fördraget.”


The ratification bill in Swedish can be accessed at:

http://www.finlex.fi/sv/esitykset/he/2008/20080023.pdf

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de Poncins

Étienne de Poncins offers a few general comments on EU economic governance and budget matters, ‘La gouvernance économique et les questions budgétaires’ in his ‘Le traité de Lisbonne en 27 clés’ (Éditions Lignes de Repères, 2008), pages 245─251, but nothing specific on Article 127 TFEU.


Fischer

‚Der Vertrag von Lissabon‘, by Klemens H. Fischer (Nomos, Stämpfli & Verlag Österreich, 2008), traces the amendments Article by Article; here on pages 269─270. He remarks that the amendments in paragraphs 1 to 5 are editorial (horizontal), but with regard to paragraph 6 he states:

„Absatz 6 erhält eine neue Fassung, durch die das Anhöringsverfahren an die Stelle des Zustimmungsverfahrens tritt.“


Priollaud and Siritzky

François-Xavier Priollaud and David Siritzky offer a short introductory explanation on economic and monetary policy (pages 246 and 247). They succinctly present the main features of the chapet on monetary policy (La politique monétaire) on pages 254 an 255 of their book ‘Le traité de Lisbonne – Commentaire, article par article, des nouveaux traités européens (TUE et TFUE)’ (La Documentation française, Paris, 2008). They offer the following description of the powers of the European Parliament:

« La modification des pouvoirs du Parlement européen

La généralisation de la procédure legislative renforce le rôle du Parlement européen en ce qui concerne la modification de certaines dispositions des statuts du SEBC et de la BCE (art. 129 TFUE) et pour l’adoption des mesures nécessaires à l’usage de l’euro (art. 133 TFUE). Les pouvoirs du Parlement sont en revanche diminués par rapport à la situation actuelle en matière de contrôle prudentiel des établisseents et marchés financiers (art. 127 § 6 TFUE). Il ne sera que consulté (comme la BCE), alors que son avis conforme était jusq’à présent requis par l’art. 105 TCE. L’unanimité est en outre maintenue sur ce point. »

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Consultation procedure

The intergovernmental character of prudential banking supervision is striking. In Article 127 TFEU, the European Parliament is marginalized, consulted (as the ECB) in the unlikely case that all 27 member states would be shaken enough by the financial turmoil to be likely to agree on a unanimous decision (regulation) to confer supervisory powers on the ECB.

Just in case someone wants to reflect on the consultation procedure (and other decision-making procedures), Martin Gellermann offers a description in Rudolf Streinz (Hrsgb.): EUV/EGV Vertrag über die Europäische Union und Vertrag zur Gründung der Europäischen Gemeinschaft (C.H.Beck, 2003). I quote the beginning of Konsultations- oder Anhörungsverfahren (page 2204):

„Als Ursprungsmodell für eine Beteiligung des Europäischen Parlaments am Prozess der gemeinschaftlichen Rechtsetzung erscheint das Konsultations- oder Anhörungsverfahren in dem der Kommission das Initiativrecht, dem Parlament eine Beratungsbefugnis und dem Rat das alleinige Entscheidungsrecht gebührt.“

In this instance, we seem to be heading towards the beginnings of the Assembly.

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The next post is going to present a few pointers on financial regulation and prudential supervision in the context of economic and monetary union (EMU).

Ralf Grahn

EU: Monetary policy VI Lisbon Treaty on an island outside Euroland

Did the objectives and the basic tasks of the European System of Central Banks (ESCB), or the potential role in financial supervision of the European Central Bank (ECB), draw any attention on an island outside Euroland?

We look at UK comments on Article 127 of the Treaty on the Functioning of the European Union (TFEU).

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Statewatch

Professor Steve Peers covered the Treaty of Lisbon in a number of Statewatch Analyses. ‘EU Reform Treaty Analysis no. 3.4: Revised text of Part Three, Titles VII to XVII of the Treaty establishing the European Community (TEC): Other internal EC policies’ (Version 2, 24 October 2007) includes the current Title VII Economic and monetary policy.

Peers presented the text of Article 105 TFEU (ToL), to be renumbered Article 127 TFEU in the consolidated version, and highlighted the changes. He offered the following succinct comment (page 11):

“The EP’s role has been downgraded here, from consent to consultation. The Council must still vote unanimously.”

The analysis 3.4 and other useful Statewatch analyses are available through:

http://www.statewatch.org/euconstitution.htm


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FCO

The Foreign and Commonwealth Office (FCO) offers a convenient source of brief annotations on Lisbon Treaty amendments in ‘A comparative table of the current EC and EU treaties as amended by the Treaty of Lisbon’ (Command Paper 7311, published 21 January 2008). It offers the following comment on Article 127 TFEU, Article 105 TFEU (ToL) in the original Lisbon Treaty (page 12):

“Draws on Article 105 TEC. Paragraph 6 replaces EP assent with consultation with the EP.”

The FCO comparative table is available at:

http://www.official-documents.gov.uk/document/cm73/7311/7311.asp

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House of Commons Library

The UK House of Commons Library Research Paper 07/86 ‘The Treaty of Lisbon: amendments to the Treaty establishing the European Community’ (published 6 December 2007) discussed ‘H. Economic and Monetary Policy’ on pages 61 to 64. Article 105 TFEU (ToL) is included in a brief description on page 62:

“Articles 105 ─ 110 (Constitution Articles III-185 ─ 190) on monetary policy are largely the same as the present Treaty Articles.”

The Library Research Paper 07/86 is available at:

http://www.parliament.uk/commons/lib/research/rp2007/rp07-086.pdf

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House of Lords

At this juncture, economic and monetary union (EMU) did not interest the House of Lords, so I found nothing on Article 105 TFEU (ToL) or 127 TFEU in the House of Lords European Union Committee report ‘The Treaty of Lisbon: an impact assessment, Volume I: Report’ (HL Paper 62-I, published 13 March 2008).

The report is available at:

http://www.publications.parliament.uk/pa/ld200708/ldselect/ldeucom/62/62.pdf


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The following post is going to look at legislative materials and comments on Article 127 TFEU from other corners of Europe.


Ralf Grahn

EU: Monetary policy V Lisbon Treaty and European level supervision?

Have the objectives of the European System of Central Banks changed during the treaty reform process?

Are the basic tasks different?

Has prudential supervision of banks kept pace with reality?

We compare Article 127 of the Treaty on the Functioning of the European Union (TFEU) with the current treaty and the previous stages of the treaty reform process since 2001.

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Lisbon Treaty comparison

Substantially, the objectives of the European System of Central Banks (ESCB) and the European Central Bank (ECB) have remained unchanged from the current Treaty establishing the European Community (TEC), via the draft Constitution and the Constitutional Treaty, to the Treaty on the Functioning of the European Union (TFEU) (paragraph 1).

Price stability is the primary objective, from Article 105(1) TEC until Article 127(1) TFEU. The complementary objectives of supporting the economic policies of the Community/Union are essentially unchanged, as are the open market principles for action.

The treaty reform process has done nothing to change the important basic tasks of the ECB: to take full responsibility for monetary policy, to conduct foreign exchange operations, to hold foreign reserves and to improve payment systems (paragraph 2).

Mandatory consultation is retained. The European Central Bank still has to be consulted by the European Community (European Union) or by a member state on draft legislation relating to monetary policy (paragraph 4).


Actually the TFEU wording is more like the TEC text than the Constitutional Treaty, because the IGC 2007 drafters often saved ink when confronted with non-essential amendments (introduced by the European Convention or directly) in the Constitutional Treaty.

This far, things were fairly straightforward, but let us turn to banking supervision.

Despite global markets and European banks, national authorities are still responsible for the prudential supervision of credit institutions and the stability of the financial system ─ however fictitious their real mastery ─ and the contributory role of the ESCB has not changed one iota during the reform process (paragraph 5).

The European Convention proposed that at least some limited aspects ─ specific tasks ─ could be conferred on the ECB by the ordinary legislative procedure, but the IGC 2004 resolutely took away even the need for the European Parliament’s assent, and the governments agreed to immobilise themselves by reinstating the requirement of unanimity in the Council for such legislation (paragraph 6).

More often than not, unanimous legislation means no legislation. (Without qualified majority voting there would be no single market.) But even in the unlikely event of meaningful legislation of small ‘slices’ of responsibility, insurance undertakings are excluded from the scope of such future legislation.

[Reality may be staring everyone in the eye, but national administrations refuse to let it disturb their customary bureaucratic circles. This is a Europe based on governments and their straitjacket rules of intergovernmental international relations, not a union of citizens, fit to work primarily in the interest of citizens. Instead of hundreds of intricately self-incapacitating pages, a democratic European Union would need a readable Constitution of perhaps twenty pages.]

Back to comparing the text versions: The wording of paragraph 6 changed somewhat along the way; the Lisbon Treaty employs the terms ‘regulations in accordance with a special legislative procedure’.


Ralf Grahn

EU: Monetary policy IV ECB supervision and Lisbon Treaty

What does the EU Lisbon Treaty say about the objectives and the basic tasks of the European System of Central Banks (ESCB) and the European Central Bank (ECB)?

Would the Treaty of Lisbon be more likely to prevent financial meltdown by instituting banking supervision at European level, under the auspices of the European Central Banks?

Are the national supervisory structures appropriate for global and European financial institutions?

We start by looking at the contents of the Treaty of Lisbon.

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The current Treaty establishing the European Community (TEC) was ─ perhaps still is destined ─ to become the Treaty on the Functioning of the European Union (TFEU), and generally the so called innovations as agreed in the 2004 IGC were to be inserted into the Treaty by way of specific modifications ‘in the usual manner’ (points 17 and 18, pages 6 and 7).

I found nothing specific in the mandate of the intergovernmental conference (IGC 2007 Mandate, Council document 11218/07, 26 June 2007) about Article 105 TEC.

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In Article 2, point 91 of the original Treaty of Lisbon (ToL) the IGC 2007 agreed on the following concerning Article 105 TEC (OJ 17.12.2007 C 306/72):

MONETARY POLICY

91) Article 105 shall be amended as follows:

(a) in the first sentence of paragraph 1, ‘ESCB’ shall be replaced by ‘European System of Central Banks, hereinafter referred to as “ESCB”,’;

(b) in the second indent of paragraph 2, the reference to Article 111 shall be replaced by a reference to Article 188 O;

(c) The text of paragraph 6 shall be replaced by the following:

‘6. The Council, acting by means of regulations in accordance with a special legislative procedure, may unanimously, and after consulting the European Parliament and the European Central Bank, confer specific tasks upon the European Central Bank concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings.’.


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The TFEU table of equivalences confirms that Article 105 TFEU (ToL) in the original Treaty of Lisbon was to be renumbered Article 127 TFEU in the consolidated version, under the title ‘Economic and monetary policy’, renumbered Title VIII (OJ 17.12.2007 C 306/211─212).

(In the consolidated version of the Lisbon Treaty, OJ 9.5.2008 C 115, the Tables of equivalences start on page 361, but the ToL numbers have been omitted.)

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Consolidated Lisbon Treaty

Article 127 of the Treaty on the Functioning of the European Union (TFEU) is found in the consolidated versions of the Treaty on European Union and the Treaty on the Functioning of the European Union, published in the Official Journal of the European Union, OJ 9.5.2008 C 115/102─103:

Part Three Union policies and internal actions

Title VIII Economic and monetary policy

Chapter 2 Monetary policy

Article 127 Lisbon Treaty
(ex Article 105 TEC)

1. The primary objective of the European System of Central Banks (hereinafter referred to as ‘the ESCB’) shall be to maintain price stability. Without prejudice to the objective of price stability, the ESCB shall support the general economic policies in the Union with a view to contributing to the achievement of the objectives of the Union as laid down in Article 3 of the Treaty on European Union. The ESCB shall act in accordance with the principle of an open market economy with free competition, favouring an efficient allocation of resources, and in compliance with the principles set out in Article 119.

2. The basic tasks to be carried out through the ESCB shall be:

— to define and implement the monetary policy of the Union,

— to conduct foreign-exchange operations consistent with the provisions of Article 219,

— to hold and manage the official foreign reserves of the Member States,

— to promote the smooth operation of payment systems.

3. The third indent of paragraph 2 shall be without prejudice to the holding and management by the governments of Member States of foreign-exchange working balances.

4. The European Central Bank shall be consulted:

— on any proposed Union act in its fields of competence,

— by national authorities regarding any draft legislative provision in its fields of competence, but within the limits and under the conditions set out by the Council in accordance with the procedure laid down in Article 129(4).

The European Central Bank may submit opinions to the appropriate Union institutions, bodies, offices or agencies or to national authorities on matters in its fields of competence.

5. The ESCB shall contribute to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system.

6. The Council, acting by means of regulations in accordance with a special legislative procedure, may unanimously, and after consulting the European Parliament and the European Central Bank, confer specific tasks upon the European Central Bank concerning policies relating to the prudential supervision of credit institutions and other financial institutions with the exception of insurance undertakings.

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The following post is going to compare Article 127 TFEU with the current TEC, the draft Constitution and the Constitution, and then take a look at some legislative materials and comments.


Ralf Grahn