Ability To Administer Justice By The Supervisor Of Credit Institutions (European Central Bank And Bank Of Spain) Regarding The Application Of The Penalty System For Improper Operations Of Banks When Practicing The Functions They Are Allowed To

This paper aims to determine: i) the administrative capacity of the European Central Bank as Supervisor and the Bank of Spain as Competent National Authority, regarding the supervision of Spanish credit institutions, namely in terms of imposition of sanctions according to the legal system; and ii) the effectiveness of the sanctioning regime within the Single Supervisory Mechanism. The methodological approach is based on the description and interpretation of provided data. The findings show that the action of the Supervisor is supported by a coherent framework for compliance with the sanctioning regime at the national and EU level, according to the data on sanctions to banks due to serious or very serious failures from 2018 and to date as published in the website of the Bank of Spain. However, the fact that such sanctioning function is shared with the European Central Bank within the procedures of the Single Supervisory Mechanism could increase the management risk, as a permanent flow of information and collaboration between both supervisors is required in order to guarantee the suitability of the applied procedure as well as the due right to defence of the banks against unfavourable decisions (if so), always seeking balance, equity and justice principles.

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