Answering the research question

Stemming from our research approach and the results achieved with the interviews conducted with the EBA’s staff, we are in a position to focus on our research question, propelled by chapter V - Over the course of its 10 years of activity, has the EBA been meeting the expectations that were placed on it and rectified the shortcomings pointed out to its predecessor?

In the first years of the EBA’s activity, the Agency has faced many challenges, especially on the regulatory front⁴⁴⁷. At any rate, the EBA’s relevance and importance have been widely recognised for its role in building up the Single Rulebook for the EU banking sector.

Over the last 10 years, the EBA has submitted hundreds of regulatory instruments covering a wide range of items with the purpose of advancing its mission of levelling the playing field across the EU banking sector. Additionally, the EBA has sought to put forward endeavours to provide training sessions to NCAs and the ECB, to launch discussion papers, reports, and

446 See e.g., pp. 68, 70, 71, 76, 83.

447 EBA (2014).

opinions on its various activity fronts, not to mention the EBA’s action on conducting EU-wide stress test exercises⁴⁴⁸.

The EBA’s efforts in monitoring the key risks in the EU banking sector and spurring convergence of supervisory practices across the MSs make the Agency far from irrelevant.

Furthermore, the obstacles⁴⁴⁹ identified due to the EBA’s ‘complicated governance structure⁴⁵⁰’ have been somehow offset not only by the reform that occurred in the realms of the SSM but also in the context of the EBA’s course of action throughout the years. As we have acknowledged in Chapter V, Section 2, the EBA’s governance is perceived as the cornerstone for guaranteeing all the validation steps necessary to mitigate the national anchoring phenomenon and ensure the quality and applicability of the EBA’s regulatory instruments.

Additionally, we contend that the EBA’s purpose remains alive and, to sustain our position, we have also collected the EBA’s staff view (from senior policy experts to higher figures such as the Chairperson) on the Agency’s relevance 10 years upon its creation.

Despite its short existence, the EBA has already been through some important changes which have led the legislator to revisit the EBA’s Founding Regulation and consequently re-think the Agency’s role⁴⁵¹. In any case, it is important to stress that the EBA’s role in completing the Single Rulebook is at the heart of the EBA’s relevance, especially when considering the dichotomy between SSM and non-SSM MSs. In the EBA’s staff view, it is the legislator’s intention to keep it that way. However, some of the EBA’s high-ranking staff consider that the field of convergence and gluing Eurozone and non-Eurozone MSs is diminishing which, as argued above, does not necessarily constitute a challenge. Convergence is very much needed to conquer a ‘more Europe’ setting, and it also paves the way for the EBA’s innovative role, such as delivering specific services to the frontline supervisors, namely monitoring reports, and the development of Benchmarking exercises, for instance, in which the EBA follows a ‘how to do’ approach in order to assist and support the national supervisors’ work, as the EBA is the entity that possesses all the data, resources, and technical expertise. This is a role that the EBA has been undertaking for quite a while, yet the legislator still does not recognise it as important as it is⁴⁵². One should also account for the areas in which the EBA has a dominant role, namely on the investment firms front, which are not considered systemically important (unless part of a banking group college) and for that reason are outside of the scope of the SSM’s operation. Additionally, as the framework to

448 See e.g., pp. 26.

449 See e.g., p. 56.

450 Supra note, p. 12.

451 See e.g., p. 40.

452 Respondent B, 18 July 2022.

regulate investment firms is not harmonised⁴⁵³, the EBA takes the lead in harmonising the supervisory practices.

Furthermore, we emphasise that as long as the EBA’s work proves to impact positively the EU’s supervisory and regulatory framework⁴⁵⁴, especially considering the EBA’s regulatory activity, one cannot deny the EBA’s significance. Indeed, the general sentiment, particularly reinforced by the EBA’s Chairperson, is that after 10 years, there is some clear evidence of the impact the EBA has added on the banking sector and the relevance it has brought up to its mission. The EBA was born to foster the Single Rulebook and supervisory convergence in the European banking sector and to enhance financial stability and transparency in that sector. We reiterate that, in furtherance of this objective, the EBA has been able to adapt to the novelties and change of circumstances to deliver an astonishing number of regulatory instruments which leads us to conclude that the assessment of its mandate has been positive so far⁴⁵⁵. Additionally, the number of aggregated mandates attributed to the EBA in the area of payments, and money laundering, as well as the call for the ESAs’ advice on other domains such as crypto-assets, operational resilience, transparency, and stress testing, denotes that the EBA and its sister-authorities have not defrauded the legislator’s expectations⁴⁵⁶.

The EBA’s staff has also referred that by contrast to the pre-EBA era, the Agency is indubitably relevant as it is the hub to spread good practices and that allows Europe to be better prepared and equipped to deal with financial/sanitary crises and build-up real relationships between the authorities. The EBA is even more relevant if we consider that it has suppressed the ‘every mate for himself’⁴⁵⁷ motto, where each MS would operate in a very dark environment. The EBA, as the only beacon for all MSs, has focused also on looking back to previous crisis events in conjunction with the national authorities in order to retrieve some lessons learned and explore the possibility of revisiting some regulatory instruments in that context⁴⁵⁸. This exercise, as a matter of fact, was positively acknowledged by NCAs who have expressed gratitude for the work the EBA develops at the secondary legislative regime — Technical Standards —, which provided them with a pertinent framework to follow as decision-makers in times of crisis.

Thus, the EBA’s relevance is also justified by its unique role of bringing together all the MSs to share experiences and work towards a common purpose⁴⁵⁹ and raising awareness among

453 Investment firms are subjected to different regimes, depending on the MS.

454 See e.g., p. 68.

455 See e.g., p. 65.

456 Respondent A, 20 June 2022.

457 Respondent J, 23 June 2022.

458 Respondent K, 23 June 2022.

459 See e.g., p. 66.

its stakeholders on the pressing issues at hand. In this sense, it is clear that the EBA has proven to be superior to its ancestor in crisis management. Contrarily to the CEBS, the EBA has been a valuable piece in restoring the EU’s economic power and ensuring financial stability⁴⁶⁰.

In light of the above line of reasoning, one cannot state with complete conviction that the EBA has failed its purpose. In addition, given the EBA’s limited timespan, it does not seem fair, in our view, to void the EBA’s action⁴⁶¹. Compared to its counterparties, the EBA is fairly recent and, for that reason, deserves a chance to handle any bottlenecks that might hinder its viability in the future.

Although we advocate for the EBA’s relevance in serving the legislator’s purpose and meeting its expectations, we also recognise that there is scope for improvements and some edges to polish. At this point, we stress that no institution, agency, nor organisation is perfect and like all things in political and economic life, there’s always room to do better.

We have confirmed the above also during our interview process, as the respondents mentioned some points that the EBA might need to improve in the future. For example, the procedure to develop joint regulatory instruments with the other sister-authorities might benefit from some enlightening, namely clearer steps to be taken in order to approve the instruments; the EBA could also implement a thorough mechanism for monitoring the individuals participating in its working structures, based on their participation and contribution status, which would help to make sure that all members would contribute positively to the discussions. Additionally, in reference to the Agency’s working structures, we convey that the topics under discussion at the EBA’s formal working structures should be narrowed down or not placed together with items without a clear connection, in a way that would make it easier for the NCAs’ deputies to have the technical expertise to engage more vigorously⁴⁶². However, in this regard, we also acknowledge that the EBA has put in place efforts to reform its working structures as need be⁴⁶³. Still in the domain of experiencing more lively discussions, the EBA is also proceeding with the necessary adjustments to make it possible to get back to physical meetings, as this is a crucial factor to contribute to more dynamic discussions and apprehend in a more thorough manner the NCAs’ input.

In the same vein, there are two clear areas in which the EBA might need to consider revisiting its governance structure and arrangements, namely on BUL and, in case the number of

non-460 See e.g., p. 34.

461 See e.g., p. 64.

462 Respondents D & G, 17 June 2022.

463 A good example is the recent reform of the working groups and standing committees’ structures in December 2021, for the first time since 2011.

SSM MSs drops dramatically, its voting modalities. Even though the present Report did not address these two points in length, we truly believe that the EBA might need to adopt some good practices to help the BUL process, which is also the opinion of the European Court of Auditors, as we have stated above⁴⁶⁴. In what concerns the EBA’s double-majority rule and the interplay with the SSM, we do not see an urgent need to tackle this point, as this is not the reality yet and the history is in the EBA’s favour.

In the meantime, we trust that the EBA will keep progressing to adapt to new realities, having in mind ensuring financial stability in the realms of the current crises affecting the banking sector; guaranteeing the technical expertise necessary to produce high-quality regulatory instruments that serve to help customers to benefit from economic stability in a world demarcated by technological change; and re-allocating the EBA’s productive capacity to account for sustainability and make sure that the risks are properly assessed, and the money is properly targeted towards sustainable investments.