European Banking Union The Implications of the Membership in the European Banking Union on the Legal and Institutional Framework in the EU Member States Dominik Králik, LL.M.EUR. (LMU Munich) University of Salzburg Department of Public, International and European Law Section European Law June 7th, 2023, Salzburg, Austria 2. •EU Law Department •Proving the correct implementation of EU Financial Law into Czech legal order Ein Bild, das Gras, Himmel, draußen, Gebäude enthält. Automatisch generierte Beschreibung Obsah obrázku obloha, venku, budova, oblečení Popis byl vytvořen automaticky 3. •Title: European Banking Union •Subtitle: The Implications of the Membership in the European Banking Union on the Legal and Institutional Framework in the EU Member States •Main Research Question: How can we assess the current legal and institutional framework for the banking supervision and resolution in the Czech Republic and in Slovakia in relation to their (non-)membership in the European Banking union? 4. 5. 6. 7. 8. 9. 10. • • • • • • • • Bank Number of clients Mother Company Probably significant bank Česká spořitelna 4,548 Mio. Erste Bank, Austria YES ČSOB 4,34 Mio. KBC Bank, Belgium YES Komerční banka 2,24 Mio. Société Générale, France YES Raiffeisenbank 1,8 Mio. Raiffeisen CEE, Austria YES UniCredit 1,5 Mio. UniCredit, Italy YES PPF Banka 850 000 - NO 11. • • • • • • • • Bank Number of clients Mother Company Significant bank Slovenská sporiteľňa, a.s. 2 329 480 Erste Bank, Austria YES VUB Banka (Intesa) 1 202 615 Italy YES Tatra banka, a.s. 811 379 Raiffeisen CEE, Austria YES Československá obchodná banka, a.s. 393 939 KBC Bank, Belgium YES UniCredit Bank Czech Republic and Slovakia 234 229 UniCredit, Italy YES Poštová banka, a.s. 134000 - NO 12. • • • • relatively high capitalisation and profitability of the banking sector low share of household debt in foreign currency marginal importance of central bank financing the lower size of the banking sector's balance sheet relative to GDP high share of financing of banks' balance sheets by customer deposits the higher concentration of the banking sector acting as a factor potentially exacerbating the negative consequences of a possible resolution of the crisis low level of household and non-financial corporation debt, low share of household debt in foreign currency the quite dominant role of banking entities owned by euro area parent entities low level of household and non-financial corporation debt the relatively significant role of the banking sector as an owner of domestic government bonds 13. • • • • Obsah obrázku text, diagram, řada/pruh, Vykreslený graf Popis byl vytvořen automaticky Obsah obrázku text, diagram, řada/pruh, Vykreslený graf Popis byl vytvořen automaticky 14. 15. • • • • • • • • • Obsah obrázku text, řada/pruh, Písmo, Vykreslený graf Popis byl vytvořen automaticky 16. 17. 18. 19. The Czech National Bank as macroprudential and microprudential authority •The Czech National Bank (Financial Markets Supervision Department I) is the organ in charge of banking prudential supervision. •The Czech National Bank is the only resolution authority for banks, credit unions and certain investment firms in the Czech Republic. •The CNB implements and enforces the rules under the Single Rule Book. • • • • • 20. National Bank of Slovakia as macroprudential authority •The organ in charge of banking prudential supervision, supervisory authority, is the National bank of Slovakia. •The stability of the European financial stability is also supported by the European Systemic Risk Board (ESRB), which issues recommendations and warnings on current risks as appropriate. The Resolution Council as microprudential authority •There is only one national resolution authority in Slovakia and it is the Resolution Council. •The Single Resolution Board (SRB) is the common resolution authority for all EU Member States participating in the Single Resolution Mechanism (SRM), i.e. the euro area countries and those EU Member States that have opted to participate in the SRM. •The Resolution Council cooperates closely with the SRB, mainly with regard to financial institutions incorporated in Slovakia. • • • • • • • 21. 22. 23. • •State Aid Issue • •The same legal framework for Slovakia and Czech Republic • •Under Recital 29 SRMR it is essential for the good functioning of the internal market that the same rules apply to all resolution actions, regardless of whether they are taken by the resolution authorities under Directive 2014/59/EU or within the framework of the SRM. The Commission should assess those measures under Article 107 TFEU. • • • • • 24. 25. •The communication between ECJ, ECB, Commission and Banking Union member states • •The Commission communicated its position on whether the granting of Deposit Guarantee Fund resources constitutes State aid in the 2013 Banking Communication, where, referring to case C-460/07 Puffer, it points out that the mere use of deposit protection fund resources to pay depositors for unavailable deposits does not constitute State aid. • •Any other allocation of funds to the deposit protection fund may constitute State aid, despite the fact that the FOV is privately financed. This is because these funds are under the control of the state and the decision to use them can be attributed to the state. • • • • • • • 26. 27. 28. THANK YOU VERY MUCH MERCI BEAUCOUP VIELEN DANK • •