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A Crisis of Governance? — From Lamfalussy to de Larosière or Bridging the Gap between Law and New Governance in the EU Financial Services Sector

Published online by Cambridge University Press:  20 January 2017

Despina Chatzimanoli
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Abstract

Modern financial law historically emerged as a patchwork of regulatory reactions to a series of financial crises. It continued to develop in sync with the ebb and flow of regulatory cycles that oscillated between periods of calm, conducive to a deregulatory frenzy, and periods of crises followed by re-regulatory fervour. Reform initiatives spurring in reaction to crises also comprise procedural/institutional reforms (i.e. those relating to the “who” and “how” of regulation, as opposed to the “what”). The latest financial crisis is no exception to this rule. This article focuses on the EU institutional reforms, which arguably represent a more radical departure from the status quo (in comparison to domestic or international initiatives) in that they involve an instance of “proper” institution-building with implications across different levels of governance. This reform is examined first against the backdrop of the existing EU agencies' legal framework and is found to constitute an important milestone in the crystallization of this framework. A closer look is then taken at the new European Supervisory Authorities' role in EU rulemaking, and to their relationship with the European Commission. Subsequently, the paper takes a further step back and offers some thoughts about the continuously mutating relationship between law and new governance practices, as illustrated in the context of EU financial regulation.

Type
Symposium on the Financial Crisis in the EU (Part 1)
Information
European Journal of Risk Regulation , Volume 2 , Issue 3 , September 2011 , pp. 322 - 339
Copyright
Copyright © Cambridge University Press 2010

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References

1 For an overview of regulatory reforms at G20 level (driving the reforms at the other international fora and at the EU and domestic level) see Paul Tucker, Deputy Governor, Financial Stability, Bank of England, “Financial Crisis and G20 Financial Regulatory Reform: An Overview”, a speech at the FSB and Korean G20 Presidential Committee Conference, Korea, 3 September 2010, available on the Internet at <http://www.bankofengland.co.uk/publications/speeches/2010/speech460.pdf> (last accessed on 5 July 2011). For the US, see a summary of the Dodd-Frank bill, 22 July 2010, available on the Internet at <http://banking.senate.gov/public/_files/070110_Dodd_Frank_Wall_Street_Reform_comprehensive_summary_Final.pdf> (last accessed on 5 July 2011). For the EU see Commission Communication, Regulating Financial Services for Sustainable growth, COM(2010) 301 final.

Regarding institutional reform initiatives see indicatively, for the UK, HM Treasury, “A New Approach to Financial Regulation: Judgment, Focus and Stability”, July 2010, available on the Internet at <http://www.hm-treasury.gov.uk/d/consult_financial_regulation_condoc.pdf> (last accessed on 5 July 2011); for the US see the White Paper for Reform: Department of the Treasury, “Financial Regulatory Reform — A New Foundation: Rebuilding Financial Supervision and Regulation”, 17 June 2009, available on the Internet at <http://tinyurl.com/38egp4y> (last accessed on 5 July 2011); Basel Committee on Banking Supervision, “Press Release: Basel Committee broadens its Membership”, 10 June 2009, available on the Internet at <http://www.bis.org/press/p090610.htm> (last accessed on 5 July 2011); IMF — Strategy, Policy, and Review Department and the Legal Department, “IMF Governance Reform”, 7 July 2010, available on the Internet at <http://tinyurl.com/2u5xpfq> (last accessed on 5 July 2011). A very useful source summarising all of these developments is CMS Cameron McKenna website “The new regulatory order: institutional change at UK, EU and international level”, available on the Internet at <http://www.law-now.com/law-now/2010/newregorder.htm> (last accessed on 5 July 2011).

The history of the proposals and negotiations of the EU regulations establishing the three new ESAs and ESRB can be found on the Commission's website (<http://ec.europa.eu/internal_market/finances/committees/index_en.htm> (last accessed on 19 December 2010)). They were finally adopted on 24 November 2010 and published at the Official Journal of the EU on 15 December 2010. They are available on the Internet at <http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2010:331:SOM:EN:HTML> (last accessed on 5 July 2011).

2 This was a four-level regulatory approach devised as a more efficient process for adopting financial legislation in the EU, without the need to change the Treaties: level 1 involved the adoption, by the Council and Parliament, of framework principles and essential rules in accordance with the usual co-decision procedure; level 2 the adoption of technical implementing measures by the Commission via the comitology procedure; level 3, the adoption by committees made up of national regulators of non-binding guidelines, recommendations and common standards in order to apply the level 1 and 2 rules in a more consistent manner; and level 4 the strengthening of the role of the Commission in enforcing compliance by Member States with EU law with the assistance of the Parliament, national regulatory bodies, other Member States and the private sector. The full Lamfalussy report is available on the Internet at <http://ec.europa.eu/internal_market/securities/docs/lamfalussy/wisemen/initial-report-wise-men_en.pdf> (last accessed on 5 July 2011).

3 The High-level group on financial supervision in the EU, “Report”, 25 February 2009, available on the Internet at <http://tinyurl.com/2cbklyk> (last accessed on 5 July 2011).

4 The new European framework combines nationally-based supervision of firms with strong coordination at European level so as to foster the production of harmonised rules as well as a set of coherent supervisory practices and enforcement. The ESAs have the power to: develop technical standards, guidelines and recommendations; monitor how rules are being enforced by national supervisory authorities; take action in emergencies, including the banning of certain products; ensure the consistent application of EU law; and, where necessary, the new Authorities will have the possibility of settling disagreements between national authorities. A Joint Committee has been introduced to ensure agreement and co-ordination between national supervisors of the same crossborder institution.

The ESRB was established with the task to monitor and assess potential threats to financial stability that arise from macro-economic developments and from developments within the financial system as a whole (“macro-prudential supervision”). To this end, the ESRB will provide an early warning of system-wide risks that may be building up and, where necessary, issue recommendations for action to deal with these risks. See the history of the proposals for the creation of the ESAs and the ESRB, available on the Internet at <http://ec.europa.eu/internal_market/finances/committees/index_en.htm#framework> and the final texts of the Regulations establishing these authorities, available on the Internet at <http://eur-lex.europa.eu/JOHtml.do?uri=OJ:L:2010:331:SOM:EN:HTML> (both last accessed on 5 July 2011).

5 Also known as: distributed public governance, fringe bodies, satellite bodies, extra-governmental organizations, independent nonmajoritarian institutions, quasi-autonomous non-governmental organizations (QUANGOs) and decentralized bodies

6 The main reasons behind their emergence, in the domestic context, can generally be traced back to the welfare state crisis: as the generous promises which characterized the post-war welfare state made evident the impossibility for the state to provide for these all, due to limitation in resources, and lack of expertise; thus these had to be outsourced. Undoubtedly, the method for doing so took different directions in different jurisdictions (and especially in the two sides of the Atlantic), and this affected the role and functioning of the agencies.

In the EU context, a series of additional circumstances further contributed to the emergence of agencies, such as the “equivalent”, so to speak, of the welfare state crisis in the EU, i.e. the need to lighten the Commission's workload, as its competences were increasing in various policy areas, while also ensuring that the recourse to the “new approach to harmonisation” (harmonisation of essentials combined with mutual recognition) — which had the advantage of preserving national prerogatives and leaving the application of EU law to the Member States — was coupled with some mechanism for co-ordination of Member State action. Another explanation for the rise of agencies in the EU can possibly be found in the need to offset the criticism that new powers were gradually being transferred to the Commission, at the borderline of the principle of subsidiarity. It is not surprising, therefore, that the lack of proper regulatory powers and the EU agencies' role as co-ordinators of Member State action has been emphasized in the EU. Flinders, Matthew, “Distributed Public Governance in the European Union”, 11(3) Journal of European Public Policy (2004), pp. 520–544.CrossRefGoogle Scholar

7 This contrasts them from other EU bodies or from institutions such as the European Central Bank (ECB), created via primary EU law.

8 Lenaerts, Koen, “Regulating the Regulatory Process: ‘Delegation of Powers’ in the European Community”, 18(1) European Law Review (1993), pp. 23–49, at p. 30.Google Scholar

9 Joint Cases C-9/56 and 10/56, Meroni v. High Authority, [1957–58] ECR 133 and 157.

10 For a quick explanation of the reasons, see supra note 6.

11 Xénophon A. Yataganas, “Delegation of Regulatory Authority in the European Union, The relevance of the American model of independent agencies”, Jean Monnet Working Paper 3/01, (2001), at p. 61; Moloney, Niamh, EC Securities Regulation (Oxford: Oxford University Press, 2002), note 99, at p. 874.Google Scholar

12 Commission Communication, Externalisation of the management of Community programmes including presentation of a framework regulation for a new type of executive agency, COM(2000) 788 final.

13 Commission Communication, European Governance — A White Paper, COM(2001) 428 final, at pp. 24 et sqq.

14 Commission Communication, The operating framework for the European Regulatory Agencies, COM(2002) 718 final.

15 Such a survey can be found in Vos, Ellen, “Reforming the European Commission: What role to play for EU agencies?”, 37 Common Market Law Review (2000), pp. 1113–1134, at pp. 1125–1128Google Scholar, on which this section draws.

16 For example via representatives of the EU institutions on the Management and Administration Boards of the agencies, and their important role in the selection and appointment of the agencies' director, the adoption of the budget, and the monitoring of the agencies' performance; or via strict statement of aims and budgetary discipline both in an a priori manner (since the Commission is continuously informed of the structure and extent of the proposed agency budgets and of the details of the agencies' proposed yearly programme) and in an a posteriori one, as agencies are obliged to present completed yearly accounts to the European Parliament and to the Council, which approves their budget. As the agency budgets constitute non-compulsory expenditure, these streams of revenue are determined by the European Parliament, which has shown its eagerness to use this power. Independent fundraising is possible, but only to the extent that it does not sidestep the process of budgetary discipline- therefore it is subject to similar oversight. The European Parliament has indeed pleaded for a standardisation of agencies' structures so as to facilitate its oversight duties, but in the past this was considered a “misplaced” request.

17 Indeed agencies should be prepared for their founding statutes to be scrutinized by the CFI, and for it to challenge the procedural fairness of their “decision-making” activities; on certain occasions, the CFI has also taken advantage of the possibility of investigating the substantive content of their actions. Ellen Vos, “Reforming the European Commission: What role to play for EU agencies?”, supra note 15, referring to footnote 69, at p. 1125.

18 Although the right of access to information of Article 225 EC, as introduced by the Amsterdam Treaty, is limited to the documents of the Council, the Commission and the European Parliament, most agencies have adopted decisions on access to their documents, encouraged by the Code of Conduct on Access to Documents (which was adopted by the Council and the Commission), and recommendations by the European Ombudsman. Ibid.

19 For example, in certain cases these groups can be attributed administrative posts within the agencies, but there is the need to ensure this is limited to audience and observer status, so that capture of the agency by particular interest groups is avoided. Ibid.

20 Finally, the process of agency decision-making is also subject to procedural requirements, while the possibility for a European Administrative Procedures Act has already been proposed by some commentators. Geradin, Damien, “The Development of European Regulatory Agencies: What the EU should learn from American Experience”, 11 Columbia Journal of European Law (2004), pp. 1–52, at p. 52.Google Scholar

21 Commission Communication, European agencies — The way forward, COM(2008)135 final.

22 Ellen Vos, “European Administrative Reform and Agencies”, Robert Schuman Centre for Advanced Studies, RSC No 2000/51, (2000).

23 The Meroni was in fact challenged in terms of the scope of its application: it could be argued, for example, that it did not concern the specific problem of public satellite bodies created by the Community legislator, but instead only the delegation of such powers to private legal persons. And, while in these situations the strictness of the Meroni is quite admissible and pertinent, the transposition of this judgment in toto to the context of agencies is mistaken and misleading.

24 See, in that respect, FSA, “The FSA's internal audit review of its supervision of Northern Rock, and the FSA management response”, 26 March 2008, available on the Internet at <http://www.fsa.gov.uk/pages/Library/Other_publications/Miscellaneous/2008/nr.shtml> (last accessed on 5 July 2011).

25 Everson, Michelle, “Independent Agencies: Hierarchy Beaters?”, 1(2) European Law Journal (1995), pp. 180–204.CrossRefGoogle Scholar

26 Ellen Vos, “Reforming the European Commission: What role to play for EU agencies?”, supra note 15.

27 Ellen Vos, “European Administrative Reform and Agencies”, supra note 22.

28 See, among others, Xénophon A. Yataganas, “Delegation of Regulatory Authority in the EU”, supra note 11, for a summary of the debate.

29 The relevant website of the European Commission (“Agencies of the European Union”, <http://europa.eu/agencies/community_agencies/efsa/index_en.htm> (last accessed on 5 July 2011)) distinguishes between Community agencies; Common Security and Defence Policy Agencies (set up within the framework of what was previously the “second pillar” of the EU); Police and Judicial Co-operation in Criminal Matters Agencies (set up within the framework of what was previously the “third pillar” of the EU); Executive Agencies (established in accordance with Council Regulation 58/2003, OJ L 11, 16.1.2003, which relate to one or more Community, i.e. first pillar, programmes, but which are set up for a limited period of time); and EURATOM agencies and bodies, created to support the aims of that Treaty. In this paper, the emphasis is on Community agencies, although the classification of agencies adopted later on in this section could also be applied mutatis mutandis to the other types of agencies, as well.

30 Everson, Michelle, “The Constitutionalisation of European Administrative Law: Legal Oversight of a Stateless Internal Market”, in Joerges, Christian and Everson, Michelle (eds), EU Committees: Social Regulation, Law and Politics (Oxford-Portland: Hart Publishing, 1999), pp. 281–309.Google Scholar

31 Xénophon A. Yataganas, “Delegation of Regulatory Authority in the EU”, supra note 11, at p. 26.

32 Everson, “The Constitutionalisation of European Administrative Law: Legal Oversight of a Stateless Internal Market”, supra note 30.

33 Kreher, Alexander, “The EC agencies between community institutions and constituents — Autonomy, Control, and Accountability”, Conference Report, RSC Conference on EC agencies, 28 Feb.1 March 1997 (San Domenico di Fiesole, Florence: Robert Schuman Centre, Interdisciplinary Research Centre, European University Institute, 1998)Google Scholar; Flinders, “Distributed Public Governance in the European Union”, supra note 6.

34 Commission Communication, European agencies — The way forward, supra note 21.

35 Thus in the US, where public services were already managed by private entities or functioned under a private law regime, outsourcing more (and more important) state tasks to independent authorities was seen as merely a natural next step and as an expansion of administrative law. Also, this meant that they were conceived as a means for alleviating the workload of the legislature in particular, which arguably explains the reason behind the fact that independent administrative authorities in the US exercise (part of) proper governmental functions (regulatory, adjudicatory and executive) in a specific regulatory area. Indeed, despite emphasis on the regulation of private activities, they are also responsible for the execution/implementation of these regulatory policies and for their application to specific cases (i.e. the adjudication of the cases before them). [NB: To be sure, Agencies in the US can also be of an executive nature, but these are different from the agencies (or independent administrative authorities) for which the US administrative system is famous].

In Europe, on the other hand, where traditionally public services were provided by the state administration, agencies were seen as a means to help ease the workload of the executive branch of government — hence their conceptualization as a contraction of (administrative) law, which explains why their role has traditionally been more limited. Giandomenico Majone, “Independence vs. Accountability? Non-Majoritarian Institutions and Democratic Government in Europe”, EUI Working Paper SPS No. 94/3 (1994).

36 This category could include agencies such as the European Food Safety Authority (EFSA), which “provides independent scientific advice on all matters with a direct or indirect impact on food safety — including animal health and welfare and plant protection […and] is […] consulted on nutrition in relation to Community legislation”. See Commission, “Agencies of the European Union”, supra note 29.

37 This is the case with, for example, the Office for Harmonisation in the Internal Market (OHIM) and the Community Plant Variety Office (CPVO), which are entrusted with the task of applying EC legal regimes to specific cases. Thus, they are given the power to apply the regime for registering trademarks and designs, or intellectual property rights for plant varieties, respectively, which are valid throughout the EU.

38 This is the case, for example, with the Community Fisheries Control Agency (CFCA), which has been “established to strengthen the uniformity and effectiveness of enforcement by pooling EU and national means of fisheries control and monitoring resources and co-ordinating enforcement activities”. See “Agencies of the European Union”, supra note 29.

39 E.g., the European Agency for Reconstruction (EAR); or the Translation Centre for Bodies of the European Union (CdT).

40 Xénophon A. Yataganas, “Delegation of Regulatory Authority in the EU”, supra note 11, at pp. 26 et sqq.

41 Such as the European Environmental Agency (EEA), or the European Monitoring Centre for Drugs and Drug Addiction (EMCDDA).

42 Such as the European Centre for the Development of Vocational Training (CEDEFOP); or the European Foundation for the Improvement of Living and Working Conditions (EUROFOUND).

43 Similar, for example, to what happens in common law systems, where judges can be considered to be partially legislators, who “create” law by “interpreting” it.

44 For example, the European Fundamental Rights Agency (FRA, previously EUMC) whose aim is to “[c]ollect, analyse and disseminate objective, reliable and comparable information related to the situation of fundamental rights in the EU; [d]evelop comparability and reliability of data through new methods and standards; [c]arry out and/or promote research and studies in the fundamental rights field; […] [p]romote dialogue with civil society in order to raise public awareness of fundamental rights” (informational tasks) and “[f]ormulate and publish conclusions and opinions on specific topics, on its own initiative or at the request of the European Parliament, the Council or the Commission” (the advisory functions); “Agencies of the European Union”, supra note 29.

45 For example, the European Aviation Safety Agency (EASA) which “provide[s] technical expertise to the European Commission by assisting in the drafting of rules for aviation safety in various areas and providing technical input to the conclusion of the relevant international agreements” and carries out certain tasks related to aviation safety “such as the certification of aeronautical products, and organisations involved in their design, production and maintenance”; “Agencies of the European Union”, supra note 29; on this website of the European Commission, the term “executive” is used to describe the latter set of the EASA's tasks; these are executive in the sense that they “execute” EU law, but, according to the distinction mentioned above it is in fact more accurate to describe them as “adjudicational” in nature.

46 Such as the European GNSS Supervisory Authority (GSA), which “manages the European satellite navigation programmes; controls the use of funds; and manages the related R&D activities; is responsible for matters related to the right to use the frequencies necessary for the operation of the systems, certification of the components, and their safety and security; […] owns the assets created or developed under the Galileo and EGNOS programmes” (the executive sub-contracting element) and “will be the licensing authority vis-à-vis the concession holders responsible for the operations and service provision of Galileo and ensure contract compliance” (the adjudicational element); “Agencies of the European Union”, supra note 29.

47 This appears to be the case with the European Joint Undertaking for ITER and the Development of Fusion Energy (Fusion for Energy), which draws on the collective expertise of its network, the European industry and research organizations (observatory model) in order to contribute to “the development and manufacturing of hi-tech components for the ITER fusion project”; “Agencies of the European Union”, supra note 29.

48 Ellen Vos, “Reforming the European Commission: What role to play for EU agencies?”, supra note 15, at p. 1126.

49 See House of Commons Treasury Committee, “Opinion on Proposals for European Financial Supervision”, Sixteenth Report of Session 2008–2009, 11 November 2009, available on the Internet at <http://www.publications.parliament.uk/pa/cm200809/cmselect/cmtreasy/1088/1088.pdf> (last accessed on 5 July 2011), paras. 29–32, and esp. at p. 16.

50 Given that, in most cases, the text of all three ESA regulations is identical, references to articles of the “ESA regulations” in this paper have been made with regard to the EBA regulation 1093/2010 of 24 November 2010; any relevant differences among the three Regulations are highlighted.

51 Commission statement in relation to Articles 290 and 291 TFEU: “As regards the process for the adoption of regulatory standards, the Commission emphasizes the unique character of the financial services sector, following from the Lamfalussy structure and explicitly recognized in Declaration 39 to the TFEU. However, the Commission has serious doubts whether the restrictions on its role when adopting delegated acts and implementing measures are in line with articles 290 and 291 TFEU.” See Minutes of the 3045th Meeting of the Council of the European Union (ECONOMIC and FINANCIAL AFFAIRS), held in Brussels on 17 November 2010, available on the Internet at <http://www.europa-nu.nl/id/vimy79ulpazc/3045th_meeting_of_the_council_of_the> (last accessed on 9 August 2011).

52 See the Commission's legislative proposals, 26 September 2009, available on the Internet at <http://ec.europa.eu/internal_market/finances/committees/index_en.htm> (last accessed on 5 July 2011).

53 Dalhuisen, Jan H., “Towards a Single European Capital Market and a Workable System of Regulation”, in Andenas, Mads and Avgerinos, Yannis V. (eds), Financial Markets in Europe — Towards a Single Regulator? (London/The Hague/New York: Kluwer Law International, 2003), pp. 35–74 Google Scholar; Richard K. Abrams and Michael W. Taylor, “Assessing the case for unified Financial Sector Supervision”, LSE Financial Markets Group Special Papers — Economic & Social Research Council, Special Paper No 134 (2002); Karmel, Roberta S., “The Case for a European Securities Commission”, 38(9) Columbia Journal of Transnational Law (1999), pp. 9–43 Google Scholar; Alexander Kern, “Establishing a European Securities Regulator: Is the European Union an Optimal Economic Area for a Single Securities Regulator? (version 3)”, Cambridge Endowment for Research in Finance, Cambridge University, Working Paper No.7 (2002).

54 Or “co-opetition”; see Esty, Daniel C. and Geradin, Damien, “Regulatory Co-opetition”, 3(2) Journal of International Economic Law (2000), pp. 235–255.CrossRefGoogle Scholar

55 More details and a literature review is available, inter alia, at Chatzimanoli, Despina, “Law and Governance in the Institutional Organisation of EU Financial Services — The Lamfalussy Procedure and the Single Supervisor Revisited” (Ph.D. Thesis on file at the European University Institute, Florence, 2008).Google Scholar

56 Also known as “new modes of governance” or “reflexive governance” or “experimental(ist) governance” or “collaborative governance”. For more details and further literature review see Chatzimanoli, “Law and Governance in the Institutional Organisation of EU Financial Services”, supra note 55.

57 de Búrca, Gráinne and Scott, Joanne, “Introduction”, 13(3) Columbia Journal of European Law — Special Issue: Narrowing the Gap? Law and New Approaches to Governance in the European Union (2007), pp. 513–517.Google Scholar

58 Ibid.

59 Scott, Joanne and Trubek, David M., “Mind the Gap: Law and New Governance Approaches to Governance in the European Union”, 8(1) European Law Journal (2002), pp. 1–18.CrossRefGoogle Scholar

60 Gráinne de Búrca and Bruno de Witte, “The Delimitation of Powers between the EU and its Member States”, European University Institute, Robert Schuman Centre of Advanced Studies Paper — RSC paper (2001).

61 Ford, Christie L., “New Governance, Compliance, and Principles- Based Securities Regulation”, 45(1) American Business Law Journal (2008), pp. 1–60 CrossRefGoogle Scholar; Ford, Christie L., “Toward a New Model for Securities Law Enforcement”, 57(3) Administrative Law Review (2005), p. 757 Google Scholar; Carl-Fredrik Bergström and Josefin Almer, “Governance and the EU Securities Sector” NewGov (New Modes of Governance Project) Ref. No: 7/D02, (2005); see also Herwig C.H. Hofmann, “Mapping the European Administrative Space”, Draft version of a paper presented at the 1st Connex Thematic Conference entitled “Towards a European Administrative Space” (2006), who seems, like many others, to suggest that Lamfalussy procedures show important similarities to comitology.

62 Chatzimanoli, Despina, “Sector-Specific and Public Law Approaches to (International) Regulatory Law: A Rationale for the Combined Use of Global Administrative Law and New Governance as Tools for the New International Law”, 77(3) Nordic Journal of International Law (2008), pp. 217–233 CrossRefGoogle Scholar; Chatzimanoli, “Law and Governance in the Institutional Organisation of EU Financial Services”, supra note 55.

63 Scott and Trubek, “Mind the Gap: Law and New Governance Approaches to Governance in the European Union”, supra note 59, who analyse this category of reaction to the emergence of new governance phenomena.

64 Ibid.

65 De Búrca and Scott, “Introduction”, supra note 57, at p. 4.

66 But see also further below, in the conclusion. It is argued there, that substantive regulatory work, also within the framework of an agency, can be made to work with methods that are flexible, interactive, iterative and experimental.

67 For a more in depth analysis see Chatzimanoli, “Law and Governance in the Institutional Organisation of EU Financial Services”, supra note 55.

68 See Commission Decision 2009/78 of 23 January 2009 establishing the Committee of European Banking Supervisors (CEBS), Article 14.

69 Lee, Ruben, “Should There Be a European Securities Commission? A Framework for Analysis”, 102 European Business Law Review (1992), pp. 102–104, at p. 104.Google Scholar

70 Although the emphasis here is on input/process legitimacy, it should be noted that, at least in this particular case, there are concerns from an output legitimacy point of view as well: given that the work of 3L3 Committees is mere layering of national approaches to what are cross-border problems means that their work could have been seen as representing no basis for a wellthought through European regulatory strategy, as they could allow for “games”, externalities, and “free riding” to occur. Suggestions for overcoming this problem have been proposed, such as the adoption of a statement of objectives and principles of (EU) financial regulation (See Moloney, Niamh, “Law-Making Risks in EC Financial Market Regulation After the Financial Services Action Plan”, in Weatherill, Stephen (ed.), Better regulation, 6 Studies of the Oxford Institute of European and Comparative Law (Oxford: Hart Publishing, 2007), pp. 321–368 Google Scholar, at Section D). Alternatively, that EU integration aims be enshrined in the national mandates of the national competent authorities (2866th Economic and Financial Affairs (ECOFIN) Council Meeting, Brussels — 8515/3/08 REV 3, p. 3). See also CEBS, “CEBS Contribution to the Lamfalussy review”, 12 November 2007, available on the Internet at <http://www.c-ebs.org/getdoc/0ec453b3-d8fe-45ec-8727-e8269253eb0f/CEBSpaperonLamfalussyreview.aspx> (last accessed on 5 July 2011), at p. 17.

71 Curtin, Deirdre, “Holding (Quasi-) Autonomous EU Administrative Actors to Public Account”, 13(4) European Law Journal (2007), pp. 523–541, at p. 540.CrossRefGoogle Scholar

72 Dehousse, Renaud, “Misfits: EU Law and the Transformation of European Governance”, Jean Monnet Program Working Paper 2 (2003), pp. 18–19.Google Scholar

73 It is, of course, conceivable that such delegation can take also the form of a combination of agencies and other mechanisms such as comitology-type processes. But ultimately these forms can be seen as simple variants of one of either agencies or comitology. In other words, the polarisation of the debate serves to illustrate the characteristics of the two “prototypes” but does not signify that there are no hybrid governance structures.

74 There is a wealth of literature that refers to the problematic aspects of comitology (partially applicable to the Lamfalussy process, not only directly, in term of its Level 2 aspects, but also by analogy in terms of the functioning of the L3 Committees).

75 Xénophon A. Yataganas, “Delegation of Regulatory Authority in the EU”, supra note 11; and Damien Geradin, “The Development of European Regulatory Agencies: What the EU should learn from American Experience”, supra note 20.

76 De Búrca and Scott, “Introduction”, supra note 57.

77 De Búrca and Scott, “Introduction”, supra note 57, who examine the relationship of new governance to constitutionalism. In line with previous thinking, it is argued here that, while a “thick” constitutionalisation based on substantive common values might not be required, a baseline limit of agreed procedural values should at least be the normative desideratum.

78 In the case of the new EU supervisory architecture, for the above reasons it is regrettable that more “law”, i.e. more certainty and clarity did not accompany the delineation of the exact contours of the powers and the mandate of the ESRB, vis-à-vis the ESAs. 79 Indeed a growing body of scholarship is supporting such a suggestion. See, for the Global Administrative Law (GAL), Project of the New York University (NYU) School of Law: Institute for International Law and Justice, New York University School of Law “Website of the Global Administrative Law Project”, available on the Internet at <http://www.iilj.org/GAL/> (last accessed on 5 July 2011); see also Chatzimanoli, “Sector-Specific and Public Law Approaches to (International) Regulatory Law”, supra note 62. Indeed, scholarship has discussed this suggestion both in the context of (international) financial regulation (David Zaring, “Informal Procedure, Hard and Soft, in International Administration”, International Law and Justice Working Papers, IILJ Working Paper 2004/6 (2004), Global Administrative Law Series), as well as in the context of general EU regulation (Various, “A Global Administrative Law Bibliography”, 68 Law and Contemporary Problems (2005), pp. 357–377, at p. 375 under Chapter X — Region and Country-specific Aspects of Global Administrative Law).