THE 'INBETWEENERS’ IN THE BANKING UNION
INSIGHTS FROM THE EXPERIENCE OF ECB-CNB CLOSE COOPERATION
DOI:
https://doi.org/10.25234/pv/29341Abstract
In July 2020, the European Central Bank (ECB) has established close cooperation with the Croatian National Bank (cro. Hrvatska narodna banka, hereafter CNB) welcoming for the first time an ‘inbetweener’, i.e., a Member State outside the euro area to the Banking Union and the ECB Banking Supervision family. Inbetweeners add to the complexity of BU governance, as close cooperation necessitates the ECB exercising bespoke supervisory powers, prompts the development of innovative regulatory and administrative solutions at Member State level to ensure the coexistence of different integration spheres, and demands institutional fine-tuning of national supervisors essential for reaping the benefits of SSM governance. In light of this, the paper examines the most significant changes to the CNB's institutional and legal framework, such as legislative and administrative amendments to empower its sanctioning role, the (ongoing) organizational overhaul in line with SSM's internal structure, and the CNB's institutional re-positioning within the national economic policy sphere in response to the narrowing of its monetary policy toolkit as a result of ERM II participation. The paper argues that inbetweeners add to the complexity of BU governance and suggests there is still much to learn about the legal and institutional implications of this agreement, lessons that can only be assessed from the perspective of an inbetweener.
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