The European Central Bank and the European Parliament in Banking Supervision: Accountability without Contestation

In the aftermath of the euro crisis, the European Central Bank (ECB) has acquired competences to directly supervise significant financial institutions in the euro area. In the framework of the Single Supervisory Mechanism (SSM), operational since 2014, the ECB has new accountability obligations towards the European Parliament (EP) – in addition to the established dialogue on monetary policy. This paper examines the inter-institutional dynamics between the ECB and the EP in the banking union, focusing on the extent to which the EP is able to hold the ECB accountable in practice. Drawing on a theoretical conceptualisation of accountability as contestation, the paper investigates ECB-EP interactions during the first three years of the functioning of the SSM (2014-2017). The findings are based on an extensive claims analysis of 12 ECB hearings before the Economic and Monetary Affairs Committee (ECON) and over 250 questions and answers exchanged between Members of the EP and the SSM Chair. It is shown that the extent to which the EP can contest ECB decisions in banking supervision is limited by far-reaching confidentiality rules and general defence of central bank independence. Although there are frequent interactions between the ECB and the EP in relation to banking supervision, their accountability relationship is more formal than substantive. There is, however, a visible clash of institutional role perceptions at the discursive level: the ECB portrays itself as the competent technocracy responsible for financial stability, while the EP sees its role as challenging or at least making transparent supervisory decisions with redistributive implications. The paper contributes to the understudied field of inter-institutional relations involving the ECB as well as to the emerging body of literature on the banking union.