Case T‑712/15

Crédit mutuel Arkéa

v

European Central Bank

(Economic and monetary policy — Prudential supervision of credit institutions — Article 4(3) of Regulation (EU) No 1024/2013 — Prudential supervision on a consolidated basis — Supervised group — Institutions permanently affiliated to a central body — Article 2(21)(c) of Regulation (EU) No 468/2014 — Article 10 of Regulation (EU) No 575/2013 — Capital requirements — Article 16(1)(c) and (2)(a) of Regulation No 1024/2013)

Summary — Judgment of the General Court (Second Chamber, Extended Composition), 13 December 2017

Economic and monetary policy — Economic policy — Supervision of the EU financial sector — Single supervisory mechanism — Prudential supervision of groups of credit institutions on a consolidated basis — Capital requirements — Scope of the control and evaluation carried out by the European Central Bank — Judicial review — Limits

Economic and monetary policy — Economic policy — Supervision of the EU financial sector — Single supervisory mechanism — Prudential supervision of groups of credit institutions on a consolidated basis — Waiver for institutions affiliated to a central body — Conditions under which applicable — Monitoring of the solvency and liquidity of the central body and affiliated institutions — Criteria

Economic and monetary policy — Economic policy — Supervision of the EU financial sector — Single supervisory mechanism — Prudential supervision of groups of credit institutions on a consolidated basis — Waiver for institutions affiliated to a central body — Conditions under which applicable — Commitments of the central body and affiliated institutions having to be of a joint and several nature or guaranteed by that body — Necessity of an obligation to transfer capital and liquidity within the group

Economic and monetary policy — Economic policy — Supervision of the EU financial sector — Single supervisory mechanism — Prudential supervision of groups of credit institutions on a consolidated basis — Waiver for institutions affiliated to a central body — Conditions under which applicable — Commitments of the central body and affiliated institutions having to be of a joint and several nature or guaranteed by that body — Concepts of joint and several liability and guarantee — Independent interpretation

Economic and monetary policy — Economic policy — Supervision of the EU financial sector — Single supervisory mechanism — Prudential supervision of groups of credit institutions on a consolidated basis — Waiver for institutions affiliated to a central body — Requirement that the central body have the status of credit institution — No requirement

Under Article 51(4) of the Rules of Procedure, if an authority to act is not lodged on behalf a party granting his or her lawyer powers of representation, the Registrar is to prescribe a reasonable time limit within which the party concerned is to produce it. That provision must be interpreted as meaning that it is possible to remedy a failure to grant an authority to act on the date on which the action is lodged by means of an ex post submission of any document confirming the existence of that authority. (see para. 30)

As regards an action brought against a decision setting out the prudential requirements for the applicant that is repealed in the course of proceedings and replaced by a decision setting out new prudential requirements itself subject to an action for annulment, the repeal of the contested decision by the second decision does not deprive the applicant of a legal interest in bringing proceedings against it. The repeal of an act of an institution does not constitute recognition of the unlawfulness of that act and has only prospective effect, unlike a judgment annulling an act, by which the act is eliminated retroactively from the legal order and is deemed never to have existed. Furthermore, the applicant retains a legal interest in bringing proceedings against the contested decision in order to prevent the possible annulment of the decision repealing it resulting in the contested decision producing effects again. If the second decision were to be annulled, the parties would be restored to their original position prior to its entry into force, a position which would thus be governed again by the contested decision. (see paras 41-43)

See the text of the decision. (see para. 55)

The prudential supervision of groups of credit institutions on a consolidated basis has essentially two aims. The first aim is to enable the European Central Bank to identify the risks likely to affect a credit institution which derive not from the institution itself, but from the group of which it forms part. The second aim is to avoid the prudential supervision of the entities making up those groups being fragmented between different supervisory authorities. Therefore, in order to comply with the aims of Regulation No 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions, Article 2(21)(c) of Regulation No 468/2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities, and the conditions laid down in Article 10(1) of Regulation No 575/2013 on prudential requirements for credit institutions and investment firms to which it refers must be interpreted in the light of the legislature’s intention to enable the European Central Bank to have an overall picture of the risks likely to affect a credit institution and to avoid the fragmentation of prudential supervision between the European Central Bank and national authorities. As regards the aim of Article 10(1) of Regulation No 575/2013, that regulation concerns the prudential requirements applicable to credit institutions. In that context, the objective pursued by Article 10(1) of Regulation No 575/2013 is clearly apparent from its wording and is to allow the competent authorities to waive in part or in full the application of certain requirements set out in the regulation to one or more credit institutions situated in the same Member State and which are permanently affiliated to a central body which supervises them and which is established in the same Member State. However, in so far as the conditions laid down in that provision do not apply under that regulation for the purpose of assessing the possibility of waiving compliance with the requirements on an individual basis, but on account of the reference made in Article 2(21)(c) of the Regulation No 468/2014, it is necessary to take into account only the aims of that provision and not the aim of Article 10(1) of Regulation No 575/2013. (see paras 58, 59, 61, 64-66, 70)

The interpretation of the relevant legislation by an administrative authority cannot bind the EU Courts which have exclusive jurisdiction to interpret EU law, under Article 19 TEU. (see para. 75)

So far as concerns the concept of central body, within the meaning of Article 2(21)(c) of Regulation No 468/2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities, that provision cannot be interpreted as meaning, in itself, that a central body must have the status of credit institution. In the first place, the wording of Article 2(21)(c) of Regulation No 468/2014 does not mention such a requirement, unlike Article 2(21)(a) of that regulation, which refers expressly to the prudential supervision of a group whose parent undertaking has the status of credit institution. In the second place, it is consistent with the aims of Regulation No 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions and of Regulation No 468/2014 for a group to be classified as a ‘supervised group’ within the meaning of Article 2(21)(c) of that regulation irrespective of whether or not the group’s central body has the status of credit institution. In the third place, the fact that the European Central Bank cannot exercise powers in relation to a central body that does not have the status of credit institution is not an impediment to the conduct of appropriate prudential supervision, since the European Central Bank is able to use its powers in relation to the entities affiliated to that central body. Furthermore, neither Article 10(1)(b) of Regulation No 575/2013 on prudential requirements for credit institutions and investment firms nor Article 11(4) of the same regulation requires a central body to have the status of credit institution in order for Article 2(21)(c) of Regulation No 468/2014 to apply. (see paras 86, 88, 93, 94, 108)

See the text of the decision. (see para. 119)

Since Regulation No 575/2013 on prudential requirements for credit institutions and investment firms does not define the concepts of ‘joint and several liability’ and ‘guarantee’ by reference to the laws of the Member States, they must be regarded as autonomous concepts of EU law. (see para. 120)

With regard to the waiving of credit institutions from the application of the requirements set out in Parts Two to Eight of Regulation No 575/2013 on prudential requirements for credit institutions and investment firms, the condition relating to joint and several liability laid down in Article 10(1)(a) of that regulation is met where there is an obligation to transfer capital and liquidity within the group to ensure that the obligations towards creditors are fulfilled. Such an interpretation is consistent with the aim of Article 2(21)(c) of Regulation No 468/2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities as well as the wording of Article 10(1)(a) of Regulation No 575/2013. (see para. 130)

The scope of national laws, regulations or administrative provisions must be assessed in the light of the interpretation given to them by national courts. However, in the absence of decisions by the competent national courts, it is for the EU Courts to rule on the scope of those provisions. (see para. 132)

See the text of the decision. (see para. 138)

Concerning the waiving of credit institutions from the application of the requirements set out in Parts Two to Eight of Regulation No 575/2013 on prudential requirements for credit institutions and investment firms, the condition of solvency and liquidity of the central body and of all the affiliated institutions laid down in Article 10(1)(b) of that regulation must be interpreted as requiring both criteria to be met. The first relates to the existence of consolidated accounts for the group. The second requires the solvency and liquidity of all entities making up the group to be subject to prudential supervision on the basis of those accounts. (see para. 147)

It is apparent from a combined reading of Article 16(1)(c) and (2)(a) of Regulation No 1024/2013 conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions that, if the prudential examination conducted by the European Central Bank shows that a credit institution’s capital and liquidity do not ensure sound management and coverage of its risks, the European Central Bank is entitled to require the credit institution to maintain a level of capital exceeding the minimum requirements set out in Article 92(1)(a) of Regulation No 575/2013 on prudential requirements for credit institutions and investment firms. Regarding the review to be carried out by the European Central Bank, it is apparent from the wording of Article 97(1)(a) of Directive 2013/36 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms that that review relates to the risks to which institutions are or might be exposed, which necessarily entails the possibility of taking into account future events capable of altering their risk profile. Therefore, by basing its decision on the possible occurrence of a future event, the European Central Bank does not commit any error of law. Furthermore, given the complexity presented by the assessment of the level of a credit institution’s CET 1 capital requirements in the light of its risk profile and events likely to have an effect on that profile, the European Central Bank enjoys a broad discretion. In that regard, review by the EU judicature of those assessments must necessarily be confined to verifying whether the rules on procedure and on the statement of reasons have been complied with, whether the facts have been accurately stated and whether there has been any manifest error of assessment or misuse of powers. The exercise of that broad discretion is not, however, excluded from review by the EU Courts. Thus, not only must the EU Courts establish whether the evidence relied on is factually accurate, reliable and consistent but also whether that evidence contains all the information which must be taken into account in order to assess a complex situation and whether it is capable of substantiating the conclusions drawn from it. (see paras 168, 176, 178, 179, 181)

See the text of the decision. (see paras 200-202)