EU Authorities Throw Out De-Risking Case Against EBA

July 25, 2022
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The European supervisory authorities' board of appeal has dismissed a case against the European Banking Authority (EBA) for an alleged non-application of EU law regarding payment services.

The European supervisory authorities' (ESAs) board of appeal has dismissed a case against the European Banking Authority (EBA) for an alleged non-application of EU law regarding payment services.

The EBA is off the hook for having decided to pass on investigating a “rather abrupt” termination of banking services, in a further sign of how topical the issue of de-risking has remained for the trading bloc in spite of the Payments Account Directive’s (PAD) passing into EU law in 2014.

The claimant in this instance had questioned the reason and legitimacy of this decision by its bank, filing a complaint with the local bank and with the national competent supervisory authority.

However, this came without success, triggering a further complaint with the EBA, which the Paris-based watchdog declined to take further.

This is in spite of the claim relating to the potential breach and/or non-application of EU law regarding payment services and access to payment accounts with basic features, as set out in the PAD.

In their dismissal of the case, the ESAs said that they were rejecting appeal as it "does not follow that the remedy should consist in allocating the task to the EBA".

According to the ESAs, the EBA’s responsibilities are “protecting the single rulebook, supervisory coordination and convergence”.

The EBA did not have a clear view of whether the national competent authority had adequately investigated the case, and that EU law dictates that the onus to initiate an investigation lies with the EBA.

This is to protect the EBA from being overwhelmed by “an excessive volume of enquiries”.

“This means that, even if a request to investigate is formally admissible, the EBA can refuse to investigate, notably because it sees no grounds, the complaint can be better dealt with by other means, or it lacks the resources,” says the decision document.

In spite of their decision to dismiss the case, the ESAs' board were sympathetic to the situation.

“Access to bank accounts and payment accounts with basic features is a prerequisite for the effective functioning of the EU internal market, the inclusiveness of the EU market for financial services and the protection of consumer rights,” the document remarks. “The issues the appellant raised are of significant concern. It is entirely understandable that the appellant should be seeking a remedy.”

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