1. Why was the Single Supervisory Mechanism (SSM) created? A) To increase taxes in the EU B) Due to failures in decentralized supervision and incorrect implementation of EU law C) To support small banks __________________________________________________________________________________________________ 2. What was the main problem with the Single Rule Book before the SSM? A) It was never used B) It was too strict C) It was applied inconsistently in practice __________________________________________________________________________________________________ 3. Which institution holds the main supervisory power in the SSM according to the ECJ? A) National banks B) European Central Bank (ECB) C) European Commission __________________________________________________________________________________________________ 4. What is the main goal of the Single Resolution Mechanism (SRM)? A) To support exports B) To centralize monetary policy C) To ensure uniform bank crisis resolution __________________________________________________________________________________________________ 5. What is a key issue for the Czech Republic in joining the Banking Union? A) Lack of banks B) Transfer of decision-making about money to the EU level C) Low interest rates __________________________________________________________________________________________________ 6. Which institution in the Czech Republic is responsible for both supervision and resolution? A) Ministry of Finance B) Czech National Bank C) European Central Bank __________________________________________________________________________________________________ 7. What is a key difference between the Czech Republic and Slovakia? A) Slovakia is not in the EU B) The Czech Republic is in the eurozone C) Slovakia is part of the Banking Union __________________________________________________________________________________________________ 8. What is a potential liquidity risk if the Czech Republic joins the Banking Union? A) Higher inflation B) Outflow of liquidity abroad C) Investment bans __________________________________________________________________________________________________ 9. Who decides on the compatibility of state aid in bank resolution? A) The ECB alone B) The European Commission C) National parliaments __________________________________________________________________________________________________ 10. What is the main conclusion about the Czech Republic joining the Banking Union? A) It is legally impossible B) It is mainly an economic and political decision C) It is mandatory 1. What is the relationship between the ECB and national authorities within the SSM? A) National authorities act independently without ECB involvement B) The ECB supervises only small institutions C) National authorities support the ECB in a decentralized system __________________________________________________________________________________________________ 2. Which factor does NOT determine whether a bank is considered significant under the SSM? A) Size of the institution B) Political influence of the bank C) Cross-border activities __________________________________________________________________________________________________ 3. What competence does the ECB have regarding less significant institutions? A) No competence at all B) Only advisory powers C) It may assume direct supervision under certain conditions __________________________________________________________________________________________________ 4. What is a key function of the Single Resolution Board (SRB)? A) Setting tax rates for banks B) Overseeing and directing national resolution authorities C) Managing monetary policy __________________________________________________________________________________________________ 5. What is MREL in the context of banking resolution? A) A liquidity ratio for central banks B) A requirement related to loss-absorbing capacity of banks C) A tax mechanism for cross-border transactions __________________________________________________________________________________________________ 6. Why might the Czech Republic perceive the second pillar (SRM) as problematic? A) Because it eliminates all national banks B) Due to transfer of resolution powers and potential financial risks C) Because it increases domestic regulation only __________________________________________________________________________________________________ 7. How does the ECB interact with countries outside the eurozone? A) It has full direct authority B) It has no interaction C) It acts indirectly through guidance and cooperation __________________________________________________________________________________________________ 8. What role does the European Commission play in bank resolution cases involving state aid? A) It executes resolution decisions B) It evaluates compatibility with EU state aid rules C) It supervises all banks directly __________________________________________________________________________________________________ 9. Why can the use of deposit guarantee funds sometimes be considered state aid? A) Because banks voluntarily contribute B) Because such funds are always private C) Because their use can be attributed to the state __________________________________________________________________________________________________ 10. What is meant by the “principle of subsidiarity” in the context of banking supervision? A) All powers must remain at the EU level B) Decisions should be taken at the most appropriate level (EU vs national) C) Only national authorities can supervise banks __________________________________________________________________________________________________ Moot Court Problem: Banking Union vs National Sovereignty Background The European Central Bank (ECB), acting within the Single Supervisory Mechanism (SSM), has decided to include a major Czech bank (a subsidiary of a large EU banking group) into a cross-border liquidity subgroup. As a result, the bank is required to transfer part of its liquidity reserves to other entities within the group located in eurozone countries. The Czech National Bank (CNB) objects to this decision, arguing that it undermines financial stability in the Czech Republic and exceeds the ECB’s competences, especially since the Czech Republic is not a member of the Banking Union. Meanwhile, the European Commission supports the ECB’s position, arguing that such measures are necessary for the proper functioning of the internal market and financial stability in the EU. ___________________________________________________________________________________________________ Parties Team A – Applicant (Czech National Bank / Czech Republic) Argues that: * The ECB exceeded its competences under EU law * The decision violates the principle of subsidiarity * National authorities must retain control over liquidity management in non-participating Member States * The measure threatens national financial stability and sovereignty ___________________________________________________________________________________________________ Team B – Defendant (ECB / European Commission) Argues that: * The ECB acted within its powers under the SSM framework * Uniform supervision is necessary to prevent fragmentation * The measure is justified to ensure financial stability across the EU * The principle of subsidiarity is respected because of the integrated nature of banking groups __________________________________________________________________________________________________ Legal Questions 1. Does the ECB have competence to impose such measures on banks in a non-eurozone Member State? 2. Does the inclusion of a bank in a cross-border liquidity subgroup violate the principle of subsidiarity? 3. To what extent can national authorities restrict EU-level supervisory decisions? 4. Is there a conflict between EU financial stability and national sovereignty? 5. Could such a measure indirectly lead to unlawful transfer of financial resources? __________________________________________________________________________________________________ Optional Twist (for advanced rounds) During the proceedings, it is revealed that: * The liquidity transferred was later used to support a failing bank in another Member State * The case raises potential issues of state aid under Article 107 TFEU __________________________________________________________________________________________________ Goal of the Moot Court Students should argue: * Competence division (EU vs national level) * Interpretation of SSM/SRM framework * Application of subsidiarity and proportionality principles * Broader implications for Banking Union integration