The 12th AIIFL Distinguished Public Lecture

Eurozone Banking Union and the EU Single Market – Differentiated Integration or Steps Towards Disintegration?

Professor Eilís Ferran
University of Cambridge
Academic Advisory Board Member, Asian Institute of International Financial Law

Wednesday, 17 April 2013, 12:30 – 1:30 pm
Academic Conference Room, 11/F Cheng Yu Tung Tower
The University of Hong Kong

With the RGC Theme-based Research Scheme Project:
“Enhancing Hong Kong’s Future as a Leading International Financial Centre”

A European banking union is urgently required in order to restore credibility and stability to the euro area banking system, to break the vicious cycle between banks and sovereign states, and thereby to help address the fundamental problems of the euro area and of the EU. An effective banking union requires a stronger and more centralized system of financial supervision. This aspect of banking union is acquiring a concrete shape in the form of the Single Supervisory Mechanism (or SSM), with the ECB as its hub. Law, politics and institutional sensitivities have influenced the design of the Single Supervisory Mechanism and the resulting systems differs in many respects from thereotical models for effective bank supervision. Could this be sowing the seeds of massive supervisory failure in the next financial crisis? And even if the single supervisory mechanism and banking union are effective, this improvement could come at a high price. The banking union is a response to the grave needs of the Euro Area but it will undoubtedly have major consequences for the EU as a whole. Is the banking union just another deviation from the uniformity of an ‘ever closer union’, which across the EU as a whole is neither a recent nor a rare phenomenon? Or is it a differentiation initiative that is more threatening because it could be a step towards some new and unknown type of federal-confederal conglomerate structure or even to the outright abandonment of the EU27? These are the questions that this talk will seek to address.

Eilís Ferran is Professor of Company & Securities Law at the University of Cambridge and a University JM Keynes Fellow in Financial Economics. Since April 2012 she has been Chair of the Law Faculty at Cambridge. She is a Professorial Fellow of St Catharine’s College, Cambridge. Her recent publications include: “Crisis driven regulatory reform” in E Ferran, N Moloney, Jennifer G Hill, John C Coffee, The Regulatory Aftermath of the Global Financial Crisis (CUP 2012); “Understanding the New Institutional Architecture of EU Financial Market Supervision” in G Ferrarini, KJ Hopt and E Wymeersch (Ed), Rethinking Financial Regulation and Supervision in Times of Crisis (OUP, 2012); “The New Mandate for the Supervision of Financial Services Conduct” (2012) 65 Current Legal Problems 411-453; “Regulatory Lessons from the Payment Protection Insurance Mis-selling Scandal in the UK” (2012) 13 European Business Organization Law Review 247-270; and “The Break-up of the Financial Services Authority” (2011) Oxford Journal of Legal Studies 455-480. She is the Specialist Adviser to the House of Lords European Union Committee (Sub Committee A) in its inquiry into banking union (September – December 2012).