11th Banking Union Conference – “Judicial Review in the Banking Union”

On 2 September 2025, global law firm Freshfields hosted the 11th Banking Union Conference in cooperation with the Institute for Law and Finance at Goethe University Frankfurt am Main and the Center for Financial Studies.

This year, renowned speakers and panellists engaged again in a dialogue on the topic of “Judicial Review in the Banking Union”, exploring legal protection mechanisms as well as the role of European courts and administrative bodies within the Banking Union’s system of checks and balances. The morning session focused on the Single Resolution Mechanism (SRM), while the afternoon session was centred around the Single Supervisory Mechanism (SSM).

Morning Session – SRM

Dominique Laboureix, Chair of the Single Resolution Board (SRB), made the opening speech themed “A thorough judicial review for a credible framework”. He highlighted that, in their first ten years of existence, the SRM and the SRB had delivered on their mandate of resolving failing banks without burdening taxpayers or destabilising markets. At the same time, a large part of the past decade had been defined by intense litigation, which had been expected for a new legal framework built from scratch and a young authority such as the SRB, Mr. Laboureix laid out. He described how the SRB’s decisions are regularly reviewed by both the European courts and the SRB’s Appeal Panel, the latter providing for a cost-effective, timely expert review of SRB decisions in a thorough process, which has helped to increase acceptance of SRB decisions. Mr. Laboureix explained that, although challenges remain, including the high volume of litigation and the need for further clarity on the interaction between administrative and judicial review, the rigorous legal scrutiny has enhanced the credibility of the framework and improved the SRB’s reasoning, enabling banks to better understand its decisions.

Following this, Anna Dunn, UK CEO and EMEA CFO at JPMorgan Chase, gave a speech on “The SRM – an international bank’s perspective”. She pointed out that while the SRM has strengthened financial stability and bank resilience over the past decade, the framework risks to become overly burdensome. Ms. Dunn noted that the EU’s ambitious financing needs—highlighted in the Draghi report—require a regulatory environment that safeguards stability without undermining competitiveness. The SRM has delivered meaningful progress, but its reliance on “soft law” has created de facto binding requirements outside the formal legislative process. This adds cost and complexity for banks, often without proportional benefits, and risks judicial challenge. As practical steps forward, Ms. Dunn proposed, for example, introducing cost-benefit impact assessments for major guidance, enhancing structured dialogue with EU institutions before new initiatives, and considering a “comply or explain” mechanism for SRB guidance. Such measures, she concluded, would improve both the effectiveness and legitimacy of the EU’s resolution regime, ensuring it supports financial stability without hampering Europe’s growth and competitiveness.

In the following panel discussion, Ms. Dunn was joined by Christy Ann Petit, Assistant Professor at Dublin City University, Freshfields Partner Andreas von Bonin, and Elke Gurlit, Professor at the University of Mainz, who moderated the discussion. Opening with a debate on institutional questions, such as the distribution of jurisdiction between national and European courts, the panel examined how accountability and review work in Europe’s bank resolution system where EU and national authorities share decision-making responsibilities, as well as the role of the SRB Appeal Panel. The panellists described reviews by the Appeal Panel as useful, pragmatic checks by experts. Another focus of the panel was the scope of judicial review of soft law. The panellists contrasted the intent of soft law—to increase predictability and constrain regulators’ discretion—with its real-world effect of adding reporting, documentation and other compliance burdens, often without clear avenues for review. Furthermore, the panellists discussed transparency of proceedings, as well as the litigation around the ex-ante contributions to the Single Resolution Fund.

Afternoon Session – SSM

René Smits, Professor emeritus at the University of Amsterdam, kicked off the afternoon session with his speech “Court oversight of European Central Bank (ECB) supervision: the first 11 years”. Key questions he addressed included how courts review ECB decisions and the issue of supervisory discretion, as well as who can challenge ECB measures—with a particular focus on the standing of shareholders and managers. He also touched upon the hurdles for obtaining compensation for supervisory wrongdoing. Looking back at 11 years of case law, Mr. Smits concluded that, in substance, judicial review has served justice in the SSM. However, he also shed light on procedural challenges, such as lengthy proceedings, issues with access to files, and inconsistencies in access to justice for managers.

Thereafter, Adam Farkas, CEO of the Association for Financial Markets in Europe (AFME), stressed in his speech “Transparency and accountability in banking supervision in the Banking Union” that supervisory “gold-plating”, whereby the ECB sets expectations that go beyond those set out in formal legislation and are often insufficiently tailored to the risk profiles or business models of individual banks, remains a key industry concern. He also shed light on challenges as a result of the ECB’s increasing willingness to deploy enforcement tools, such as periodic penalty payments, in relation to banks undergoing transformation processes in an evolving legislative environment. According to Mr. Farkas, mechanisms of review, such as by the Administrative Board of Review (ABoR) of the ECB or the European courts, are limited in scope and especially do not extend to informal communications that may have a major impact on firms. Going forward, he proposed reviewing and strengthening the ABoR process to ensure its functioning as an accessible and effective accountability mechanism. He concluded with a call for closer collaboration between supervisors, policymakers, and the industry, in order to close the remaining gaps in the Banking Union framework and build a supervisory system that is both rigorous and supportive of competitiveness and sustainable growth.

Pentti Hakkarainen, Chair of the ABoR, gave a speech on “The ABoR, a pragmatic appeal route without publicity”. He focused on the role of the ABoR, an administrative body comprising independent experts who review ECB supervisory decisions when challenged by banks or other parties. Mr. Hakkarainen underlined that ABoR offers a faster, more cost-effective, and confidential alternative to an appeal direct before courts. He concluded that this provides banks with an efficient way to resolve disputes with supervisors without resorting immediately to lengthy and public court battles.

In their subsequent panel discussion hosted by Freshfields Partner Janina Heinz, Mr. Hakkarainen, Mr. Farkas and Mr. Smits engaged in a lively debate about several topics that had been raised in the previous speeches, such as access to files. Mr. Farkas made clear that improved transparency is key to the credibility of supervision.

After Freshfields Partner Alexander Glos delivered his concluding remarks, the fruitful exchange continued at Goethe University.