Missing pieces in the patchwork of EU financial stability regime? The case of central counterparties

This article builds on a recent case (Case T-496/11, UK v. ECB (Location policy)), in which the General Court determined that the ECB does not have competence to regulate so-called Central Counterparties (CCPs), and annulled an ECB policy which sought to restrict access to the euro area of certain non-euro area CCPs. It is argued that the Court’s central finding, though possibly correct, is problematic from the perspective of financial stability, especially considering the growing systemic importance of CCPs. Second, the Court’s finding is symptomatic of certain drawbacks inherent in the patchy architecture of the evolving EU financial stability regime, which is excessively focused on banks. Finally, the case acts as a warning of likely future situations where the exercise of EU level competences and forms of direct administration related to the objective of financial stability can result in an outright conflict with basic free movement rights.