Digitalisation, Sustainability, and the Banking and Capital Markets Union: Thoughts on Current Issues of EU Financial Regulation

439 Pages·2023·6.644 MB·English

by  Lukas Böffel, Jonas Schürger

EBI STUDIES IN
BANKING AND CAPITAL MARKETS LAW
Digitalisation, Sustainability,
and the Banking and
Capital Markets Union
Thoughts on Current Issues of
EU Financial Regulation
Edited by Lukas Böffel · Jonas Schürger
EBI Studies in Banking and Capital Markets Law
Series Editors
Danny Busch, Financial Law Centre (FLC), Radboud University Nijmegen,
Nijmegen, The Netherlands
Christos V. Gortsos, National and Kapodistrian University of Athens, Athens,
Greece
Antonella Sciarrone Alibrandi, Università Cattolica del Sacro Cuore, Milan,
Milano, Italy
Editorial Board
(All members of the EBI Academic Board)
Dariusz Adamski, University of Wroclaw
Filippo Annunziata, Bocconi University
Jens-Hinrich Binder, University of Tübingen
William Blair, Queen Mary University of London
Concetta Brescia Morra, University of Roma Tre
Blanaid Clarke, Trinity College Dublin, Law School
Veerle Colaert, KU Leuven University
Guido Ferrarini, University of Genoa
Seraina Grünewald, Radboud University Nijmegen
Christos Hadjiemmanuil, University of Piraeus
Bart Joosen, Free University Amsterdam
Marco Lamandini, University of Bologna
Rosa Lastra, Queen Mary University of London
Edgar Löw, Frankfurt School of Finance & Management
Luis Morais, University of Lisbon, Law School
Peter O. Mülbert, University of Mainz
David Ramos Muñoz, University Carlos III of Madrid
Andre Prüm, University of Luxembourg
Juana Pulgar Ezquerra, Complutense University of Madrid
Georg Ringe, University of Hamburg
Rolf Sethe, University of Zürich
Michele Siri, University of Genoa
Eddy Wymeersch, University of Ghent
General Series Editors
(all members of the EBI Academic Board)
Danny Busch, Financial Law Centre (FLC), Radboud University Nijmegen,
Nijmegen, The Netherlands
Christos V. Gortsos, National and Kapodistrian University of Athens, Athens,
Greece
Antonella Sciarrone Alibrandi, Università Cattolica del Sacro Cuore, Milan, Italy
The European Banking Institute
The European Banking Institute based in Frankfurt is an international centre for
banking studies resulting from the joint venture of Europe’s preeminent academic
institutions which have decided to share and coordinate their commitments and
structure their research activities in order to provide the highest quality legal,
economic and accounting studies in the field of banking regulation, banking
supervision and banking resolution in Europe. The European Banking Institute
is structured to promote the dialogue between scholars, regulators, supervisors,
industry representatives and advisors in relation to issues concerning the regula-
tion and supervision of financial institutions and financial markets from a legal,
economic and any other related viewpoint.
As of May 2021, the Academic Members of the European Banking Institute
are the following: Universiteit van Amsterdam, University of Antwerp, University
of Piraeus, Alma Mater Studiorum–Università di Bologna, Universität Bonn,
Academia de Studii Economice din Bucures,ti (ASE), Trinity College Dublin,
University of Edinburgh, Goethe-Universität, Universiteit Gent, University of
Helsinki, Universiteit Leiden, KU Leuven University, Universidade Católica
Portuguesa, Universidade de Lisboa, University of Ljubljana, Queen Mary
University of London, Université du Luxembourg, Universidad Autónoma
Madrid, Universidad Carlos III de Madrid, Universidad Complutense, Madrid,
Johannes Gutenberg University Mainz, University of Malta, Università Cattolica
del Sacro Cuore, University of Cyprus, Radboud Universiteit, BI Norwe-
gian Business School, Université Panthéon - Sorbonne (Paris 1), Université
Panthéon-Assas (Paris 2), University of Stockholm, University of Tartu,
University of Vienna, University of Wrocław, Universität Zürich.
Supervisory Board of the European Banking Institute:
Thomas Gstaedtner, President of the Supervisory Board of the European Banking
Institute
Enrico Leone, Chancellor of the European Banking Institute
European Banking Institute e.V.
TechQuartier (POLLUX), Platz der Einheit 2
60327 Frankfurt am Main, Germany
Website: www.ebi-europa.eu
·
Lukas Böffel Jonas Schürger
Editors
Digitalisation,
Sustainability,
and the Banking
and Capital Markets
Union
Thoughts on Current Issues of EU Financial
Regulation
Editors
Lukas Böffel Jonas Schürger
Associated Researchers Group Young Researchers Group
European Banking Institute e.V. European Banking Institute e.V.
Frankfurt, Germany Frankfurt, Germany
ISSN 2730-9088 ISSN 2730-9096 (electronic)
EBI Studies in Banking and Capital Markets Law
ISBN 978-3-031-17076-8 ISBN 978-3-031-17077-5 (eBook)
https://doi.org/10.1007/978-3-031-17077-5
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Foreword
It is rather uncommon and, therefore, it is particularly noteworthy and
welcome when early-stage researchers take the initiative to publish a book
meeting high academic standard. This applies a fortiori if the book covers
areas characterised by their broad scope and high complexity, such as
financial regulation. Accordingly, it was both ambitious and challenging
when the Young Researchers of the European Banking Institute (EBI),
led by Lukas Böffel and Jonas Schürger, proposed this project in late
2021. However, with this final product, they did not fall short of their
promise (and my expectations) to deliver an in-depth collective work with
thought-provoking and excellent chapters, and I wish to congratulate
them personally warmly for that achievement.
Overall, the book entails 14 contributions, covering well-selected and
intriguing topics on digital finance, sustainable finance, as well as the EU
banking and capital markets unions. Almost all authors are members of
either the Young Researchers Group (YRG) or the Associated Researchers
Group (ARG) of the EBI. Their contributions reveal a remarkably
high academic level, analysing the issues from a normative, economic,
technological and/or policy-oriented perspective. Notably, most of the
contributors are currently conducting their Ph.D. theses on the same or,
at least, a closely related topic as in this book, which has made the research
even more profound.
v
vi FOREWORD
The chapters of this book serve academics, practitioners, judges, super-
visors and regulators as a valuable source to shed light on the current
drivers of EU financial regulation. Therefore, it should not be left unread.
August 2022 Christos V. Gortsos
Professor of Public Economic Law
at the National and Kapodistrian
University of Athens, President
of the Academic Board
of the European Banking Institute
Athens, Greece
Preface
EU Financial Regulation is a highly complex area with seemingly endless
facets. Also, it is extremely volatile. The last 20 years have proven that
both the economic and legal landscape can transform almost from one day
to the other. Notably, the European financial sector’s resilience was put to
a test twice in less than two decades—first, after the Global Financial Crisis
and second, as a consequence of the pandemic. Notwithstanding this chal-
lenging environment, other developments evolved, namely digitalisation
and (human caused) climate change. These two shape the current polit-
ical, economic, and scholarly debates in financial regulation. And for good
reason: both digitalisation and sustainability do not only question tradi-
tional financial regulation concepts nowadays, but they raise doubts as
to how the current regime can function in the next ten, 20 or 50 years.
Moreover, they heavily impact the ongoing discussion about the Banking
and Capital Markets Union.
We hope that this book sheds light on some of the pressing issues and
stimulates the discussion. The book comprises 14 chapters and is divided
into three sections, namely digital finance, sustainable finance as well as
the Banking and Capital Markets Union.
Within the digital finance section, this book addresses the question of
whether the biggest tech companies are putting us in a new “too tech
to fail” situation. Two chapters then discuss the regulation of Artificial
Intelligence and Machine Learning in the context of EU capital markets.
Moreover, analyses of the regulatory forecast of tokenised crowdfunding,
vii
viii PREFACE
the regulatory coordination and diffusion in digital financial services, and
the phenomenon of open banking are part of this section. The last chapter
discusses the management of ICT third party risk under the new Digital
Operational Resilience Act.
The sustainable finance section begins with a holistic comparison of
sustainability regulation in the banking and insurance industry. This is
followed by an analysis shedding light on the financial stability implica-
tions of sustainability in EU microprudential banking regulation. The last
chapter discusses the primary law limits of a green monetary policy in the
EMU.
Last but not least, selected issues concerning the two major projects
of EU regulation, the Banking Union and the Capital Markets Union,
are analysed. The first chapter deals with duty of care as a judicial review
tool for SSM composite procedures. Afterwards, the clash between public
interest and property rights in EU banking resolution is investigated. The
last two chapters take a group perspective: one focuses on preemptive
financing arrangements within cross-border banking groups and one on
post-Brexit enforcement of subsidiarisation in the European Union.
All of the 17 authors have conducted or are conducting their Ph.D.
in the field of financial regulation. Almost all authors are affiliated
with the European Banking Institute (EBI), either as members of the
Young Researchers Group (YRG) or the Associated Researchers Group
(ARG). The European Banking Institute is an international Frankfurt-
based centre for banking studies, a joint venture of Europe’s preeminent
academic institutions, sharing and coordinating their commitments and
structuring their research activities to provide the highest quality of legal,
economic and accounting studies in banking regulation, banking super-
vision and banking resolution in Europe. Under this umbrella, the YRG
operates as an inter-disciplinary and international platform for exchange
and mutual learning for early-stage researchers in the rapidly developing
area of banking law and policy. It conducts research and promotes debate
and dialogue between young researchers in relation to issues concerning
regulation and supervision of financial institutions and financial markets.
We are grateful for the tremendous support and the opportunity given
to us to edit this book by the Academic Board of the EBI, namely Prof.
Christos Gortsos and Prof. Matthias Haentjens. Furthermore, we thank
the editors of the series for approving and including our book proposal
PREFACE ix
in this great series. Finally, we thank all our contributors whose diligent
and excellent work made it very pleasant to edit this book.
Frankfurt, Germany Dr. Lukas Böffel, LL.M. (Berkeley)
Frankfurt, Germany Dr. Jonas Schürger
August 2022