Supervisory Liability for Surveillance Failure in the EU Financial System

An investigation into the liability of financial market regulators suggests that difficulties arise from several factors including the heterogeneous nature of the very notion of responsibility that can lead to concepts of liability with very different connotations depending on the legal system under consideration. A comprehensive survey must evaluate the increasingly transnational operating range of financial supervisors and can help the interpreter to appreciate the full implication of this responsibility. The European regulatory framework reveals numerous and substantial differences in the liability of financial supervisors, resulting from the deficient or erroneous exercise of public functions. In some Member States, the legislative or judicial authority has expressly ruled that supervisors are required to respect their obligations to the community rather than to individual savers. It follows that, when there is a lack of a specific duty of protection in terms of individual interests, financial supervisors cannot be held liable for economic losses suffered by depositors and shareholders as a result of their wrongdoing. The present chapter analyses the coherence or incoherence of the different approaches taken in a number of jurisdictions towards justifying liability of supervisory authorities for failed supervision