A legal perspective of the single resolution mechanism

Abstract

Purpose– to review the file on the Single Resolution Mechanism in the context of Banking union, the influence of that file and identify legal issues by implementing SRM. Design/methodology/approach– purposely to explore the actual meaning of legal norms and legislations as well as content and to analyze the literature the systematic and document analyses, synthesis, comparative, critical thought methods were used. Findings– potential legal basis problems might go from the degree of the centralization and the appropriation with the primary law. First, SRM proposal might require changes to primary law. Second, it is unclear is proposal in line with the legal basis of Article 114 TFEU (especially suggested comprehensive transfer of executive competences from Member States to the Commission) which allows for the harmonization of law in the EU; Also it could cause the interest of conflict with state of primary law. Another possible legal issue- boundary between the Commission becoming the Resolution Authority. Further, legal risk pertains to resolution decisions that may factually impact on national budgets, it is reliable that much stronger budget protection must be given to participating Member States in order to ensure legitimacy and compliances with constitutional requirements of Member States; Last but not least, the legal issue might be in the context, whether the delegation of powers to the Board envisaged in the proposal is compatible with EU treaties and the general principles of EU law, [...]