The Application of National Law by the European Central Bank : Challenging European Legal Doctrine?

The operationalisation in late 2014 of European Regulation 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions and establishing a Single Supervisory Mechanism (SSMR) has profoundly changed the European financial market regulatory and supervisory landscape. The most apparent change is the role of the European Central Bank (ECB) in the new integrated single supervisory framework in which it is responsible for the effective and consistent functioning of the Single Supervisory Mechanism (SSM). One prominent feature of the SSM are the arrangements concerning the application of national law by the ECB. Pursuant to Article 4 (3) sub-para. 1 SSMR, in applying all relevant Union law for the purpose of carrying out the tasks conferred on it by the SSMR, including all relevant secondary law, the ECB must not only apply national legislation by which options explicitly granted in regulations have been exercised, but also national legislation transposing relevant EU Directives. These arrangements have implications that surpass the operation of the SSMR itself, as they touch upon fundamental aspects of European legal doctrine that have received comparably less attention until now. By way of illustration, in this short written version of a contribution to the 2019 ECB Legal Conference the implications of two aspects linked to the application by a Union institution of national law are discussed: the direct application by the ECB of Directives that have been inadequately implemented into national law and, moreover, the exercise of public power by the ECB that is at least partially rooted in national law. The latter point has recently also been scrutinised by the German Federal Constitutional Court (Bundesverfassungsgericht) in its decision on the compatibility with the German Federal Constitution of the Single Supervisory Mechanism and the Single Resolution Mechanism