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Publishers Abstract:
In recent years, bank failures in different EU countries have very often been followed by court actions in damages introduced by depositors against the banking supervisor for alleged negligence or improper conduct in the performance of their duties. Although in some EU countries cases on supervisory liability have been reported for a long time, the phenomenon has gained in importance in recent years across Europe: at present, most banking failures seem to be followed by liability claims directed against the supervisory authority. Different explanations for the growing 'popularity' of the supervisory liability issue can be put forward. First, the increasing formalization of banking regulation, mainly as a consequence of the adoption of European directives and the need to implement these directives into formal rules at national level, concurrently diminishes the discretion that supervisors traditionally enjoyed in the exercise of their powers. Second, the increased litigation risk run by supervisory authorities should be put in the broader context of the increased assertiveness of the financial consumers, who in general experience fewer burdens in taking recourse to court actions. The basic assumption of this paper is that integrated markets within the European Union should function under more or less similar rules as regards possible supervisory liability.
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