1 Kingsbury, Benedict, Krisch, Nico et al., “The Emergence of Global Administrative Law”, 68 Law and Contemporary Problems (2005), pp. 15 et sqq., at p. 20.Google Scholar

2 The same is proposed for the international level of the financial architecture but, even though coordination has become more intense, from the point of view of this paper, trust is missing in the international sphere and no common supervision (except for the already existing supervisory colleges for the big financial institutions (Systemically Important Financial Institutions, SIFIs) is to be expected. See Pan, Eric J., “Challenge of International Cooperation and Institutional Design in Financial Supervision: Beyond Transgovernmental Networks”, 11 Chicago Journal of International Law (2010), pp. 243 et sqq. Google Scholar

3 Risk governance is a rather new concept. Whereas the term ‘governance’ is used in political science to describe “the multitude of actors and processes that lead to collective binding decisions”, the term ‘risk’ is meant to describe not only simple risks “calculated as a linear function of probabilities and effects” but rather systemic risks. See for details on the notion and its history, Asselt, Marjolein B.A. van and Renn, Ortwin, “Risk Governance”, 14 Journal of Risk Research (2011), pp. 431 et sqq., at pp. 431 and 436.CrossRefGoogle Scholar

4 Art. 5 TEU.

5 The EU is certainly more advanced in constructing an institutional risk architecture than the international level is. For a discussion, see Cassese, Sabino, The Global Polity. Global Dimensions of Democracy and the Rule of Law (Seville: Global Law Press 2012).Google Scholar

6 For definitions, see Art. 2 Regulation (EC) No 549/2004 of the European Parliament and of the Council of 10 March 2004 laying down the framework for the creation of the single European sky (the Framework Regulation), OJ 2004 L 96/31. ‘Air traffic management (ATM)’ means the aggregation of the airborne and ground-based functions (air traffic services, airspace management and air traffic flow management) required to ensure the safe and efficient movement of aircraft during all phases of operations. ‘Air traffic services’ means the various flight information services, alerting services, air traffic advisory services and ATC services (area, approach and aerodrome control services). ‘Air traffic control (ATC) service’ means a service provided for the purpose of: (a) preventing collisions between aircrafts and in the manoeuvring area between aircraft and obstructions; and (b) expediting and maintaining an orderly flow of air traffic. ‘Air navigation services’ (ANS) means air traffic services; communication, navigation and surveillance services; meteorological services for air navigation; and aeronautical information services.

7 Council Regulation (EEC) No 2408/92 of 23 July 1992 on access for Community air carriers to intra–Community air routes, OJ 1992 L 240.

8 For food regulation, see Vos, Ellen, “The EU Regulatory System on Food Safety: Between Trust and Safety”, in Michelle Everson and Ellen Vos (eds.), Uncertain Risks Regulated (Abingdon: Routledge–Cavendish 2009), pp. 249 et sqq.Google Scholar, on Genetically Modified Organisms, see Shaffer, Gregory C. and Pollack, Mark A., “The EU Regulatory System for GMOs”, in Michelle Everson and Ellen Vos (eds.), Uncertain Risks Regulated (Abingdon: Routledge–Cavendish 2009), pp. 269 et sqq.Google Scholar

9 Literature on the democratic deficit of the EU is legion. Instead of many, see Meny, Yves, “De La Democratie En Europe: Old Concepts and New Challenges”, 41 Journal of Common Market Studies (2003), pp. 1 et sqq.CrossRefGoogle Scholar and for a critique see Moravcsik, Andrew, “The Myth of Europe's ‘Democratic Deficit’”, Intereconomics: Journal of European Public Policy (2008), pp. 331 et sqq.Google Scholar

10 The term risk denotes the possibility that an undesirable state of reality (adverse effects) may occur as a result of human activity or natural events. Risk is conventionally defined as the harm of an event (effect) times the probability of this event. See Renn, Ortwin, Risk Governance. Coping with Uncertainty in a Complex World (London: Earthscan 2008), p. 1.Google Scholar Those risks usually refer to hazards which are known and calculable due to past experiences whereas uncertainty refers to hazards where no probability is known. See for a discussion in the context of risk governance, van Asselt, Marjolein B.A., Vos, Ellen and Rooijackers, Bram, “Science, Knowledge and Uncertainty in EU Risk Regulation”, in Everson, Michelle and Vos, Ellen (eds), Uncertain Risks Regulated (Abingdon: Routledge–Cavendish 2009), 359 et sqq., at p. 360 et sqq.Google Scholar

11 The parallel is drawn also by the European Commission, Presentation on SES II – Achieving more sustainable and better performing aviation, SCG 11 – 13 May 2009, slide 2, available on the Internet at <http://www.skybrary.aero/bookshelf/books/663.pdf> (last accessed on 8 July 2012): “Work towards a seamless single sky like EMU for the single market”.

12 OECD, “Emerging Risks in the 21st Century An OECD International Futures Project”, September 2003, available on the Internet at <http://www.oecd.org/dataoecd/23/56/19134071.pdf> (last accessed on 8 July 2012), at p. 6 for a broad definition of risk sectors. Van Asselt and Renn, “Risk Governance”, supra note 3, p. 436 et seq. describe systemic risks as follows: “The term ‘systemic’ describes the extent to which a risk is embedded in the larger contexts of societal processes. (…) Systemic risks are not confined to national borders or a single sector and do not fit the linear, monocausal model of risk. They are complex (multi–causal) and surrounded by uncertainty and/or ambiguity. (…) In very general terms, risk refers to the possibility of damage…. or to tolerated or unintended consequences of purposeful human actions which may occur that violate something that humans value. (…) Those assessing or appraising risks pertaining to future events or consequences are necessarily confronted with uncertainty.”

13 For a discussion of definitions although focused on financial markets, see Schwarcz, Steven L., “Systemic Risk”, 97 Georgetown Law Journal (2008), pp. 193 et sqq., at p. 196 et sqq. Google Scholar For a development of the notion, see OECD, “Emerging Risks in the 21st Century”, supra note 12.

14 Recital 1 of Regulation (EC) No 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No 716/2009/EC and repealing Commission Decision 2009/77/EC.

15 Alberto Alemanno, “The European Volcanic Ash Crisis: Between International and European Law”, 14 ASIL Insights (2010), available on the Internet at <http://www.asil.org/files/insight100712pdf.pdf> (last accessed on 18 April 2013).

16 See Regulation (EC) No 549/2004, supra note 6. SES I consists of a Framework Regulation and three technical regulations on the provision of air navigation services, the organization and use of the airspace, and the interoperability of the European air traffic management network.

17 See the decision of the German Court concerning the negligence of the Swiss NSAs in the überlingen accident, LG Konstanz, Decision of 27 July 2006, AZ 4O 234/05 H.

18 See Commission Staff Working Document, Impact Assessment. Accompanying the document Proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directives 77/91/EEC and 82/891/EC, Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC and 2011/35/EC and Regulation (EU) No 1093/2010, available on the Internet at <http://ec.europa.eu/internal_market/bank/docs/crisis-management/2012_eu_framework/impact_assessment_final_en.pdf> (last accessed on 18 April 2013), COM(2012)280 final, at p. 65: “There is a misalignment between the responsibilities of national authorities and the cross border nature of the banking industry. First priorities of national supervisors and resolution authorities are financial stability within their own jurisdiction and protection of national creditors, depositors and taxpayers. In addition, host countries have strong interest in influencing decisions made by home countries concerning the whole banking group.” See also Duncan Alford, “The Lamfalussy Process and EU Bank Regulation: Another Step on the Road to Pan–European Regulation”, 25 Annual Review of Banking & Financial Law (2006), pp. 389 et sqq., at p. 391: “Despite this growth in international banking, national governments have been very hesitant to enter into international agreements that would require them to cede regulatory control of banks incorporated or operating within their jurisdictions. It even appears that some policymakers analogize a transfer of regulatory control over the banking system to a transfer of sovereign power.”

19 See “Slouching towards a banking union”, The Economist, 9 March 2012, at p. 67.

20 There are many dimensions of trust, see Löfstedt, Ragnar E., Risk Management in Post-Trust Societies (London: Earthscan 2009), at p. 6 Google Scholar “Trust can be an expression of confidence between the parties in an exchange transaction and can either be process/system or outcome–based”. Löfstedt concentrates primarily on the relationship between risk managers and the public. For our purposes, trust between the different states and their supervisory agencies is at issue; the trust relationship between the authorities and the public is only relevant in a secondary stage. Giddens, Anthony, The Consequences of Modernity (Cambridge: Polity Press 1990), at p. 34 Google Scholar defines trust as follows: “Trust may be defined as confidence in the reliability of a person or a system, regarding a given set of outcomes or events, where the confidence expresses faith in the probity or love of another, or in the correctness of abstract principles.” This definition is used here (without the unsuitable parts like love).

21 For other trust–creating mechanisms, like fairness, competence, efficiency, see Löfstedt, Risk Management in Post–Trust Societies, see supra note 20.

22 Risk regulation has many stakeholders, not least the public. Marjolein B.A. van Asselt, Ellen Vos and van Asselt, Vos and Rooijackers, “Science, Knowledge and Uncertainty in EU Risk Regulation”, supra note 10, p. 359 distinguish between risk producers (e.g. companies), risk assessors (e.g. scientific experts), risk managers (civil servants and supervisory authorities), risk protesters (e.g. NGOs in the name of potential risk victims). Here the focus is on risk managers only and their interaction. On the growing use of agencies for risk regulation, see Kim, Jinhee, Klika, Christoph and Versluis, Esther, “Agencies as Risk Managers? Exploring the Role of EU Agencies in Authorization Procedures”, in van Asselt, Marjolein B.A., Versluis, Esther and Vos, Ellen (eds), Balancing between Trade and Risk. Integrating Legal and Social Science Perspectives (London: Routledge 2013), Chapter 8.Google Scholar

23 Van Asselt and Renn, “Risk Governance”, supra note 3, p. 435.

24 Other expressions for it or its variants include “assurance game”, “coordination game” and “trust dilemma”.

25 In the words of Jacques de Larosière, “The High-Level Group on Financial Supervision in the EU”, 25 February 2009 (Larosière Report), available on the Internet at <http://ec.europa.eu/internal_market/finances/docs/de_larosiere_report_en.pdf> (last accessed on 8 July 2012), at p. 4: “In essence, we have two alternatives: the first ‘chacun pour soi’ beggar-thy-neighbour solutions; or the second – enhanced, pragmatic, sensible European cooperation for the benefit of all to preserve an open world economy.” Those words describe a classical stag hunt game.

26 For details of the stag hunt game see Skyrms, Brian, The Stag Hunt and the Evolution of Social Structure (Cambridge: Cambridge University Press 2004).Google Scholar He holds that a stag hunt describes much more aptly most of those situations where political scientists used to assume a prisoners’ dilemma game (PD). Indeed, in certain situations with repeated interactions, the PD turns into a stag hunt game. Whereas Hobbes reframed in game theoretical terms would assume a PD, the stag hunt would be the appropriate game to describe a social contract (p. xii).

27 Jean–Jacques Rousseau, “Discourse on the Origin of Inequality” (1754), available on the Internet: “In this manner, men may have insensibly acquired some gross ideas of mutual undertakings, and of the advantages of fulfilling them: that is, just so far as their present and apparent interest was concerned: for they were perfect strangers to foresight, and were so far from troubling themselves about the distant future, that they hardly thought of the morrow. If a deer was to be taken, every one saw that, in order to succeed, he must abide faithfully by his post: but if a hare happened to come within the reach of any one of them, it is not to be doubted that he pursued it without scruple, and, having seized his prey, cared very little, if by so doing he caused his companions to miss theirs.”

28 The stag hunt game is deemed to be almost as important as a game as the more renowned prisoners’ dilemma game in international relations. For details, see Baird, Douglas G., Gertner, Robert and Picker, Randal C., Game Theory and the Law (Cambridge (Mass.): Harvard University Press 1994)Google Scholar; Morrow, James D., Game Theory for Political Scientists (New Jersey: Princeton University Press 1994).Google Scholar

29 On trust as a social mechanism, see Fehr, Ernst, “On the Economics and Biology of Trust”, 7 Journal of the European Economic Association (2009), pp. 235 et sqq.CrossRefGoogle Scholar

30 Skyrms, Brian, The Stag Hunt and the Evolution of Social Structure (Cambridge: Cambridge University Press 2004), pp. 9 et sqq.Google Scholar

31 For the EU, see Ortino, Matteo, “The Role and Functioning of Mutual Recognition in the European Market of Financial Services”, 56 ICQL (2007), pp. 309 et sqq Google Scholar. Generally Majone, Giandomenico, “International Regulatory Cooperation: A Neo–Institutionalist Approach”, in Bermann, George A., Herdegen, Matthias and Lindseth, Peter L. (eds.), Transatlantic Regulatory Co–Operation: Legal Problems and Political Prospects, (Oxford: Oxford University Press 2000), pp. 120 et sqq.Google Scholar; Nicolaidis, Kalypso A. and Shaffer, Gregory C., “Transnational Mutual Recognition Regimes: Governance without Global Government”, 68 Law and Contemporary Problems (2005), pp. 263 et sqq. See also early on OECD, Regulatory Co–operation for an Interdependent World (Paris: OECD 1994).Google Scholar The procedures that govern the work of these committees follow the standard procedures established in Regulation (EU) 182/2011 of the European Parliament and of the Council of 16 February 2011 (replacing Decision 1999/468/EC), laying down the rules and general principles concerning mechanisms for control by Member States of the Commission's exercise of implementing powers. The new ‘comitology procedure’ gives amended rights to Member States to control the way the Commission uses its delegated powers. The powers conferred to the European Parliament have been reduced slightly by the new Regulation, and an Appeals Committee has been introduced in case no agreement can be reached in the committee.

32 See only European Commission, Completing the Internal Market. White Paper from the Commission to the European Council (Milan, 28–29 June 1985). COM (85) 310 final, 14 June 1985, paras. 102 et sqq.

33 Competition, also between systems, fosters innovation – this is the credo of most economists. See Fey, Gerrit, Banken zwischen Wettbewerb, Selbstkontrolle und staatlicher Regulierung. Eine ordnungsökonomische Analyse (Stuttgart: Lucius und Lucius 2006), at p. 44 et sqq.CrossRefGoogle Scholar

34 ECJ, Case 120/78, Rewe/Bundesmonopolverwaltung für Branntwein (Cassis de Dijon), [1979] ECR 649, at pp. 662 et sqq.

35 ECJ, Case 205/84 Commission/Germany (Insurances) [1986] ECR I-03755, at para. 36.

36 Financial integration in Europe is uneven across market segments. Financial markets encompass money markets, bond markets, equity and banking markets. I will concentrate on the latter.

37 For details, see Aaken, Anne van, “Transnationales Kooperationsrecht nationaler Aufsichtsbehörden als Antwort auf die Herausforderung globalisierter Finanzmärkte”, in Möllers, Christoph, Voßkuhle, Andreas and Walter, Christian (eds.), Internationales Verwaltungsrecht (Tübingen: Siebeck/Mohr 2007), pp. 219 et sqq.Google Scholar

38 This was founded after the Asian Crisis: Hans Tietmeyer, (G-7), “International Cooperation and Coordination in the Area of Financial Market Supervision and Surveillance”, 1999, available on the Internet at <http://www.financialstabilityboard.org/publications/r_9902.pdf> (last accessed on 18 April 2013).

39 Press Release, Financial Stability Forum, “Financial Stability Forum Re-established as the Financial Stability Board”, 2 April 2009, available on the Internet at <http://www.financialstabilityboard.org/press/pr_090402b.pdf> (last accessed on 18 April 2013). For details, see Enrique R. Carrasco, “The Global Financial Crisis and the Financial Stability Forum: The Awakening and Transformation of an International Body”, 19 Transnational Law & Contemporary Problems (2009), pp. 203 et sqq.

40 Financial Stability Board, “Key Standards for Sound Financial Systems”, available on the Internet at <http://www.financialstabilityboard.org/cos/key_standards.htm> (last accessed on 18 April 2013).

41 Available on the Internet at <http://ec.europa.eu/internal_market/finances/docs/actionplan/index/action_en.pdf> (last accessed on 18 April 2013). It entailed 42 measures, mostly directives covering certain market segment regulations in order to create a single financial market for corporate and a secure market for private clients. It also entailed supervisory modernization.

42 For a short overview, see Walker, George, “European Financial Programme: Content, Structure and Completion”, European Business Law Review (2004), pp. 305 et sqq. Google Scholar and Moloney, Niamh, “New Frontiers in EC Capital Market Law: From Market Construction to Market Regulation”, 40 Common Market Law Review (2003), pp. 809 et sqq.Google Scholar

43 European Commission, “White Paper on Financial Services Policy 2005–2010”, available on the Internet at <http://ec.europa.eu/internal_market/finances/docs/white_paper/white_paper_en.pdf> (last accessed on 18 April 2013), at p. 5.

44 For details, see van Aaken, Anne, “Variable Strukturen der kooperativen Aufgabenwahrnehmung in der Architektur der Finanzmarktaufsicht: Die überformung europäischer Finanzmarktregulierung durch internationale Standards”, in Stefan Kadelbach (ed.), 60 Jahre Integration in Europa: Variable Geometrien und politische Verflechtung jenseits der EU (Baden–Baden: Nomos 2011), pp. 75 et sqq.CrossRefGoogle Scholar

45 Alexandre Lamfalussy, “Final Report of the Committee of Wise Men on the Regulation of European Securities Markets”, 2001, available on the Internet at <http://ec.europa.eu/internal_market/securities/docs/lamfalussy/wisemen/final-report-wise-men_en.pdf> (last accessed on 18 April 2013).

46 These recommendations are included in the report of the highlevel group on financial supervision in the EU, chaired by Jacques de Larosière (Larosière report), which was submitted to the EC on 25 February 2009.

47 For a detailed analysis, see Lomnicka, Eva, “The Home Country Control Principle in the Financial Services Directives and the Case Law”, European Business Law Review, 2000, pp. 324 et sqq.CrossRefGoogle Scholar

48 In the service sector, the ECJ was crucial in establishing the prohibition of de jure and de facto discrimination mirrored in the mutual recognition principle, Case C-76/90 Säger/Dennemeyer, ECR [1991] I-4221 See Ortino, supra note 31.

49 Art. 23 et sqq. Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (Banking Directive), OJ 2006 L 177/1.

50 Art. 40, 132 Banking Directive, supra note 49.

51 For details on the more technical aspects of financial conglomerates, see Michael Gruson, “Consolidated and Supplementary Supervision of Financial Groups in the European Union”, Institute for Law and Finance Working Paper No. 19, 2004, available on the Internet at <http://www.ilf-frankfurt.de/uploads/media/ILF_WP_019.pdf> (last accessed on 18 April 2013).

52 Functional exceptions are e.g. liquidity supervision, Art. 41 Banking Directive, supra note 49.

53 Art. 30 (2) Banking Directive, supra note 49.

54 For the structure before the crisis of 2007, see Kathrin Berkenbusch, Grenzüberschreitender Informationsaustausch im Banken-, Versicherungs- und Wertpapieraufsichtsrecht (Baden-Baden: Nomos 2004). The principle of information exchange found its primary law foundation in Art. 10 TEC, which also has a horizontal effect as well as in the secondary law of the FSAP directives.

55 Ortino, “Mutual Recognition”, supra note 31.

56 Art. 42 Banking Directive, supra note 49.

57 Art. 43 Banking Directive, supra note 49.

58 New committees were created: the European Securities Committee – ESC, the European Banking Committee – EBC, the European Securities Regulators Committee – ESRC, the European Insurance and Pensions Committee – EIOPC and the European Financial Conglomerates Committee – EFCC.

59 Committee of European Securities Regulators – CESR, Committee of European Banking Supervisors – CEBS, Committee of European Insurance and Occupational Pensions Supervisors – CEIOPS.

60 For details, see Moloney, Niamh, “The Lamfalussy Legislative Model. A New Era for the EC Securities and Investment Services Regime”, 52 International and Comparative Law Quarterly (2003), pp. 509 et sqq. Google Scholar; Ferrarini, Guido, “Contract Standards and the Markets in Financial Instruments Directive ( MiFID ): An Assessment of the Lamfalussy Regulatory Architecture”’, 1 European Review of Contract Law (2005), pp. 19 et sqq. Google Scholar; Schmolke, Klaus Ulrich, “Der Lamfalussy- Prozess im Europäischen Kapitalmarktrecht”, Neue Zeitschrift für Gesellschaftsrecht (2005), pp. 912 et sqq. Google Scholar

61 The problems are aptly described in recital 8 of the EBA Regulation (EC) No 1093/2010 of the European Parliament and of the Council of 24 November 2010, OJ L 331/12: “The Union cannot remain in a situation where there is no mechanism to ensure that national supervisors arrive at the best possible supervisory decisions for cross-border financial institutions; where there is insufficient cooperation and information exchange between national supervisors; where joint action by national authorities requires complicated arrangements to take account of the patchwork of regulatory and supervisory requirements; where national solutions are most often the only feasible option in responding to problems at the level of the Union; and where different interpretations of the same legal text exist.”

62 Commission Communication on European Financial Supervision, COM (2009) 252 final (May 27, 2009), Press Release, Council of the European Union, Council Conclusions on Strengthening EU Financial Supervision (9 June 2009), Presidency Conclusions, Brussels European Council (10 July 2009), at p. 2.

63 Supra note 25

64 See e.g. European Commission, “Restoring the health and stability of the EU financial sector”, 2012, available on the Internet at <http://ec.europa.eu/internal_market/smact/docs/20120206_restoring_health_en.pdf> (last accessed on 18 April 2013). For a short overview of the new system, see Pablo Iglesias Rodríguez, “Towards a New European Financial Supervision Architecture”, 16 Columbia Journal of European Law online (2009), available on the Internet at <http://www.cjel.net/wp-content/uploads/2009/10/rodriguez.pdf> (last accessed on 18 April 2013).

65 The legislative competence for the establishment of authorities is laid down in Article 114 (previously Article 95 of the Treaty establishing the European Community) of the Treaty on the Functioning of the European Union (hereafter TFEU). For the tasks and powers of Art. 8 EBA Regulation, see supra note 61.

66 Established by Regulation (EC) No 1093/2010 of the European Parliament and of the Council of 24 November 2010, OJ 2010 L 331/12.

67 For a short overview, see Rodriguez supra note 64.

68 The EBA was given a central role in establishing a European Single Rulebook, a common set of fully harmonised rules that will be binding and directly enforceable in all EU Member States by means of a Regulation, see Annual Report 2011, available online on the Internet at <http://eba.europa.eu/cebs/media/Publications/Other%20Publications/Annual%20report/EBA2012_Annual-reportfinal-online.pdf> (last accessed on 18 April 2013), at p. 6. This concerns e.g. banks’ own books, liquidity and capital standards. See Art. 10 EBA Regulation, supra note 61, on the procedure for regulatory technical standards.

69 For the activities of EBA, see Annual Report 2011, supra note 68.

70 This is without prejudice to the Commission's powers pursuant to Article 258 TFEU to initiate infringement proceedings and without prejudice to any liability that that Member State might incur in accordance with the case law of the Court of Justice of the European Union if its supervisory authorities fail to take the action required by the Authority (see recital 31 EBA Regulation, supra note 61).

71 The ESMA has now direct supervisory powers over Credit Rating Agencies. Also, the ESAs may temporarily restrict or forbid certain financial transactions, e.g. Art. 9 Nr. 5 EBA Regulation, supra note 61.

72 Before: Art. 131 Banking Directive, supra note 49, now: Art. 21 EBA Regulation.

73 Art. 19, 20 EBA Regulation, supra note 61. There are now 44 colleges in place, Commission Staff Working Document, supra note 16, at p. 65.

74 Art. 18 EBA Regulation, supra note 61. The same is planned for the bank resolution system for cross-border banks, Commission Staff Working Document, supra note 18, at p. 65: “The college of supervisors and the college of resolution authorities will discuss and approve the group recovery and resolution plans and any measure to improve the resolvability of groups. The college will be led by the consolidating supervisor. The EBA will play a role in resolving the disputes irrespective of the national assignment of the resolution functions in Member States and under these circumstances its decision will be binding.”

75 Commission Staff Working Document, supra note 18, at p. 12, “A key shortcoming to effective cooperation is the misalignment between the national accountability and mandate of supervisors (protecting interests of depositors and creditors at national level) and the cross-border nature of the banking industry, which complicates voluntary co-operation between supervisors of different Member States and leads to inefficient and possibly competing resolution approaches and suboptimal results at EU level.”

76 Art. 17 EBA Regulation, supra note 61.

77 The problem was aptly described by the Commission Memo MEMO/12/656 from 10/09/2012, available on the Internet at <http://europa.eu/rapid/press-release_MEMO-12-656_en.htm> (last accessed on 18 April 2013): “When the financial crisis spread to Europe in 2008, we had 27 different banking regulatory systems in place, all based on national rules and national rescue measures. Some form of European coordination existed but it was related to exchanges of information and rather informal cooperation procedures. This was not sufficient to respond to the financial sector crisis and its contagion to sovereigns. A fully–fledged banking union will be key to supporting economic and monetary integration. Pooled monetary responsibilities have indeed spurred closer economic and financial integration, and increased the possibility of cross–border effects in the event of bank crises. Common and more integrated banking supervision for the Euro area is one important pillar to make sure that supervision abides by the highest standards. This will build the necessary trust between Member States which is a condition for using common backstops, notably the direct recapitalization by the ESM of banks. Once common supervision for the Euro area is in place, the Commission's intention is to build on existing proposals for deposit guarantee schemes and bank recovery and resolution, moving towards a more integrated approach also in these areas.” (emphasis added).

78 See the first draft for an integrated financial framework or “financial union” as debated by the European Council, Conclusions, Brussels, 29 June 2012, EUCO 76/12. Available on the Internet at <http://consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/131388.pdf> (last accessed on 18 April 2013) and “The Euro Crisis: Inching Towards Integration”, The Economist, 7 July 2012, at p. 15.

79 For more details, see Pitschas, Rainer (ed.), Integrierte Finanzdienstleistungsaufsicht (Berlin: Duncker & Humblot 2002) and Yannis Avgerinos, “The Need and the Rationale for a European Securities Regulator”, in: Mads Adenas and Yannis Avgerinos (eds.), Financial Markets in Europe: Towards a Single Regulator? (The Hague Kluwer Law International 2003), at p. 145.Google Scholar

80 Completing the Euro. A road map towards fiscal union in Europe. Report of the “Tommaso Padoa-Schioppa Group” under the Patronage of Jacques Delors and Helmut Schmidt, June 2012, available on the Internet at <http://www.notre-europe.eu/fileadmin/IMG/pdf/CompletingTheEuro_ReportPadoa-SchioppaGroup_NE_June2012_Summary.pdf> (last accessed on 18 April 2013).

81 European Commission (2012), “A Roadmap towards a Banking Union”, COM (2012) 510 final.

82 See the European Commission´s proposal on resolution schemes: Proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directives 77/91/EEC and 82/891/EC, Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC and 2011/35/ EC and Regulation (EU) No 1093/2010, COM/2012/0280 final – 2012/0150 (COD).

83 Dirk Schoenmaker, Banking union: “Where we’re going wrong”, in Thorsten Beck (ed.) Banking Union for Europe – Risks and Challenges, VoxEU ebook, 16 October 2012, available on the Internet at <http://www.voxeu.org/content/banking-union-europerisks-and-challenges> (last accessed on 18 April 2013). “By contrast the national deposit insurance systems and, more generally, the national authority responsible for bank restructuring (i.e. in practice today's supervisors and finance ministries) would have a tendency to minimise their own costs by keeping the bank alive through support from the ECB. National authorities would naturally have a tendency to blame an ‘unfair’ ECB for not recognising the strength of ‘their’ bank which should not be closed, but saved. (…). Over time other conflicts will arise; for example if the ECB has made a mistake and led a bank to take too much risk. National authorities would then have a point in complaining if they had to pay up for the cost of this mistake. The best way to avoid these potential conflicts and provide the new Eurozone supervisor with proper incentives is to move gradually deposit insurance and resolution to the Eurozone level as well, thus ensuring eventually the needed alignment of responsibilities.”

84 See France and Germany – Together for a stronger Europe of Stability and Growth, Press Release of the German Government, No. 187/13 of May 30th 2013, available on the Internet at <http://www.bundesregierung.de/Content/DE/_Anlagen/2013/05/2013-05-30-dtfrz-erklaerung-englisch.pdf?__blob=publicationFile&v=3> (last accessed on 09 June 2013). See also The Wall Street Journal of June 5th 2013, p. 1 ECB faces resistance on Bank Union.

85 E.g. the Chicago Convention, according to which each State is responsible for safety oversight in civil aviation within its jurisdiction. The Chicago Convention on International Civil Aviation, 7 December 1944, already provides for minimum standards to ensure the safety of civil aviation and environmental protection.

86 For the accident in überlingen, which showed the problem of fragmented airspace and national responsibilities shared between national supervisory authorities and privatized ATCs, see Stephan Hobe, “How Can ATS be Held Liable… and Privatized?”, 56 Zeitschrift für Luft.- und Weltraumrecht (2007), pp. 1 et sqq.

87 Böckstiegel, Karl-Heinz and Reifarth, Jürgen, “Die Luftaufsicht im südwestdeutschen Raum”, 32 Zeitschrift für Luft- und Weltraumrecht (1983), pp. 183 et sqq., at p. 208.Google Scholar

88 E.g. airworthiness of airplanes, air crew competence, ATM and ANS, including ATC.

89 Its purpose is to prevent collisions and expedite and maintain an orderly flow of air traffic.

90 Perron, A.E. du, “Liability of Air Traffic Control Agencies and Airport Operators in Civil Law Jurisdictions”, 10 Air Law (1985), pp. 203 et sqq. Google Scholar; Early, Stephen B., Garner, William S., Martin Ruegsegger et al., “The Expanding Liability of Air Traffic Controllers”, 39 Journal of Air Law and Commerce (1973), pp. 599 et sqq., at p. 599Google Scholar; Ruhwedel, Edgar, “Flugsicherheit, Luftverkehrskontrolle und Haftung”, 22 Zeitschrift für Luft–und Weltraumrecht (1973), pp. 258 et sqq., at p. 259.Google Scholar

91 For details, see van Dam, Roderick D. and Andries, Stéphanie, “European Organization for the Safety of Air Navigation (Eurocontrol)”, in Wolfrum, Rüdiger (ed.), Max Planck Encyclopedia of Public International Law (Oxford University Press, online editionGoogle Scholar, [http://www.mpepil.com], last accessed on 5 July 2012: 2009).

92 Efforts to shape an EU airspace date back to 1996, when the European Commission published a White Paper on Air Traffic Management (“Freeing Europe's Airspace”), which was followed by the 1997 initiative of EUROCONTROL members to open up membership to the EC. For the development and the institutions, see Yael Grushka-Cockayne and Bert De Reyck, “Towards a Single European Sky”, 39 Interfaces (2009), pp. 400 et sqq. and Benedikt Langner and Marcus Schwenke, “Der einheitliche europäische Luftraum: Single European Sky”, cepStudie, 2011, available on the Internet at <http://www.cep.eu/fileadmin/user_upload/Kurzanalysen/Single_European_Sky/cepStudie_Single_European_Sky.pdf> (last accessed on 18 April 2013).

93 It comprises 4 regulations: the Framework Regulation (supra note 6); Regulation (EC) No 550/2004 of the European Parliament and of the Council of 10 March 2004 on the provision of air navigation services in the single European sky (the service provision regulation) OJ 2004 L 96/10; Regulation (EC) No 551/2004 of the European Parliament and of the Council of 10 March 2004 on the organisation and use of the airspace in the single European sky (the airspace regulation) OJ 2004 L 96/20; Regulation (EC) No 552/2004 of the European Parliament and of the Council of 10 March 2004 on the interoperability of the European Air Traffic Management network (the interoperability regulation), OJ 2004 L 96/26.

94 Art. 1 (h) Regulation (EC) No 1070/2009, OJ 2009 L 300/34: “functional airspace block” means an airspace block based on operational requirements and established regardless of state boundaries, where the provision of air navigation services and related functions are performance-driven and optimised with a view to introducing, in each functional airspace block, enhanced cooperation among air navigation service providers or, where appropriate, an integrated provider.

95 European Commission, Communication from the Commission. First Report on the Implementation of Single Sky Legislation. Achievements and the Way Forward, COM (2007) 845 final.

96 See Vos, “The EU Regulatory System on Food Safety”, supra note 8 and Kim, Klika and Versluis, supra note 22.

97 Art. 4 Framework Regulation, see supra note 6.

98 Through adoption of Directive 2006/23/EC on a Community air traffic controller license, which establishes common requirements on licensing and training of air traffic controllers.

99 See Art. 2 Service Provision Regulation.

100 E.g. between Germany and Switzerland, see Karl–Heinz Böckstiegel and Jürgen Reifarth, “Die Luftaufsicht im südwestdeutschen Raum”, 32 Zeitschrift für Luft–und Weltraumrecht (1983), pp. 183 et sqq. See also Art. 2 (3) and (4) Service Provision Regulation: “3. In respect of functional airspace blocks that extend across the airspace falling under the responsibility of more than one Member State, the Member States concerned shall conclude an agreement on the supervision… 4. National supervisory authorities shall make appropriate arrangements for close cooperation with each other to ensure adequate supervision of air navigation service providers holding a valid certificate from one Member State that also provide services relating to the airspace falling under the responsibility of another Member State. Such cooperation shall include arrangements for the handling of cases involving non–compliance with the applicable common requirements set out in Article 6 or conditions set out in Annex II.”

101 Based on Art. 9 Regulation EC 2096/2005 and letter of the Commission to the NSAs TREN F2/LT/TS D (2009) 76840 of 13 January 2010, available on the Internet at <http://www.skybrary.aero/bookshelf/books/1079.pdf> (last accessed on 18 April 2013).

102 European Commission, Communication from the Commission: First Report on the Implementation of the Single Sky Legislation: Achievements and the Way Forward, COM(2007)845 final, 20 December 2007, available on the Internet at <http://www.skybrary.aero/bookshelf/books/457.pdf> (last accessed on 18 April 2013).

103 Regulation (EC) 1070/2009 of the European Parliament and of the Council of 21 October 2009 amending Regulations (EC) No 549/2004, (EC) No 550/2004, (EC) No 551/2004, and (EC) No 552/2004 in order to improve the performance and sustainability of the European aviation system, OJ 2009 L 300/34.

104 There is now a firm deadline for implementation (4 December 2012). Art. 9a Regulation (EC) No 1070/2009 of the European Parliament and of the Council of 21 October 2009 amending Regulations (EC) No 549/2004, (EC) No 550/2004, (EC) No 551/2004 and (EC) No 552/2004 in order to improve the performance and sustainability of the European aviation system (OJ L 300, 14.11.2009, p. 34).

105 Commission Regulation (EU) No 691/2010 of 29 July 2010 laying down a performance scheme for air navigation services and network functions and amending Regulation (EC) No 2096/2005 laying down common requirements for the provision of air navigation services, OJ 2010 L 201/1, at p. 1.

106 Art. 9 Commission Regulation (EU) No 691/2010 of 29 July 2010, supra note 104.

107 Regulation (EC) No 216/2008 of 20/02/2008 of the European Parliament and of the Council on common rules in the field of civil aviation and establishing a European Aviation Safety Agency, and repealing Council Directive 91/670/EEC, Regulation (EC) No 1592/2002 and Directive 2004/36/EC, OJ 2008 L 79/1. For the implementation of Regulation (EC) No 216/2008 (the Basic Regulation, BR), the European Commission is assisted by the EASA committee and the SES committee. Another committee of importance as regards aviation safety is the Air Safety Committee, which is best known for being the guardian of the so called “safety list” as provided by Directive 2004/36/CE of the European Parliament and of the Council of 21 April 2004 on the safety of third-country aircraft using Community airports. The EASA has legal, administrative and financial autonomy.

108 Regulation (EC) No 1108/2009 amending Regulation (EC) No 216/2008 in the field of aerodromes, air traffic management and air navigation services, OJ 2009 L 309/51. It repeals Directive 2006/23/EC on community air traffic controller licences.

109 Art. 20 of Regulation (EC) No 1108/2009 instructs EASA to “… carry out on behalf of Member States the functions and tasks of the state of design, manufacture or registry when related to design approval”, including type–certification of products, and certification of design organisations, production organisations located inside or outside the territory of Member States, as well as maintenance organisations located outside the territory of Member States. All type–certificates are therefore now issued by the EASA and are valid throughout the European Union.

110 Art. 21 of Regulation (EC) No 1108/2009 gives EASA responsibility for the certification of pilots and pilot training, as well as associated functions such as aero-medical facilities and flight simulation training devices, supra note 107.

111 The new article 22a extends EASA responsibility to include certification of organisations providing pan-European ATM/ANS services and of organisations providing ATM/ANS services in the airspace of one or more EASA Member States but located outside their territory. Article 22b empowers the EASA to issue and renew certificates of air traffic controller training organisations located outside the territory of the Member States and, where relevant, their personnel.

112 The proposal for the extension of the EASA remit to ATM, ANS and airports was adopted as Regulation (EC) No 1108/2009 of the European Parliament and of the Council of 21 October 2009 amending Regulation (EC) No 216/2008 in the field of aerodromes, air traffic management and air navigation services and repealing Directive 2006/23/EC, supra note 107.

113 Commission Regulation (EC) No 1315/2007 of 8 November 2007 on safety oversight in air traffic management and amending Regulation (EC) No 2096/2005, OJ 2007 L 291/16.

114 As stated in Recital 1 of Regulation (EC) No 1108/2009 of 21/10/2009 of the European Parliament and of the Council amending Regulation (EC) No 216/2008 in the field of aerodromes, air traffic management and air navigation services and repealing Directive 2006/23/EC, OJ 2009 L 309/51: “intention to progressively extend the tasks of the European Aviation Safety Agency (the Agency), with a view towards a ‘total system approach’, to aerodrome/airport safety and interoperability, air navigation services (ANS) and air traffic management (ATM).”

115 The license introduced by Directive 2006/23/EC of the European Parliament and of the Council of 5 April 2006 on a Community air traffic controller licence, supra note 97.

116 Commission Regulation (EC) No 805/2011 of 10/08/2011 laying down detailed rules for air traffic controllers’ licences and certain certificates pursuant to Regulation (EC) No 216/2008 of the European Parliament and of the Council (OJ 2011 L 206). See also Regulation (EC) No 1108/2009, supra note 93, Annex Vb.

117 Recital 13 of Commission Regulation (EC) No 805/2011, supra note 115.

118 Recital 25 Commission Regulation (EC) No 805/2011, supra note 115: “The Agency should make an evaluation of the European air traffic controller licensing system and of further improvements necessary towards a ‘total aviation system approach’ and to establish full compliance with the essential requirements as described in Annex Vb of Regulation (EC) No 216/2008, with a view to submitting an opinion to the Commission, including possible amendments to this Regulation.”

119 See Alemanno, supra note 15.

120 It brings together representatives from EUROCONTROL, the European Commission, the EASA, EU Member States and air transport stakeholders. Its main role is to facilitate the management of crisis situations affecting aviation in the European Civil Aviation Conference (ECAC) region. The EACCC is responsible for alerting the aviation community to an impending crisis and for proposing, coordinating and implementing the measures required to deal with it. It has no power to issue binding rules, but acts as a coordination device. Its powers thus lag behind the crisis powers in financial markets.

121 It was set up by the adoption on 29 July 2010 of Regulation 691/2010 laying down a performance scheme for air navigation services and network functions.

122 EUROCONTROL, acting through the Performance Review Commission (PRC) and supported by the Performance Review Unit (PRU), has been designated the Performance Review Body (PRB) until 30 June 2015. The PRB will advise the EC in setting EU-wide targets, assessing national/FAB performance plans and monitoring the performance of the system in four key performance areas: safety, capacity, environmental impact and cost-efficiency.

123 Commission Decision of 29 July 2010 on the designation of the Performance Review Body of the Single European Sky. C (2010) 5134 final, available on the Internet at <http://ec.europa.eu/transport/air/single_european_sky/doc/2010_07_29_decision.pdf> (last accessed on 8 July 2012).

124 Declaration of Madrid, Conclusions of the High Level Conference, on the Roadmap towards implementing the Single European Sky, Madrid, 25 and 26 February 2010, available at: http://www.skybrary.aero/bookshelf/books/1074.pdf, now in Art. 9b Regulation (EC) No 1070/2009.

125 Art. 2 Regulation (EC) No 1070/2009, supra note 93.

126 Art. 8 (4) Regulation EC 550/2004, supra note 92 and Regulation (EC) No 1070/2009, supra note 79.

127 Art. 2 (4), (5), (6) Regulation (EC) No 1070/2009, supra note 93.

128 Christopher Hood, The Blame Game. Spin, Bureaucracy, and Self-Preservation in Government (Princeton/Oxford: Princeton University Press 2011), p. 7.

129 Beck, Ulrich, Risikogesellschaft. Auf dem Weg in eine andere Moderne (Frankfurt/M.: Suhrkamp 1986).Google Scholar

130 Hood, Christopher, The Blame Game. Spin, Bureaucracy, and Self-Preservation in Government (Princeton/Oxford: Princeton University Press 2011)Google Scholar, chapter 1: presentational strategies which deal with the perception of loss and harm, also over time, policy strategies and agency strategies which is our topic here. Here, the development of multi-level governance, public-private-partnerships and semi-autonomous bodies are known elements (p. 19).

131 This is not always the case – there are many facets of the term ‘responsibility’. But from a legal perspective, liability is a core element of responsibility. See Hartwig, Matthias, “International Organizations or Institutions, Responsibility and Liability”, in Wolfrum, Rüdiger (ed.), Max Planck Encyclopedia of Public International Law (Oxford University Press, online edition, [http://www.mpepil.com], last accessed on 5 July 2012: 2011)Google Scholar.

132 § 4 (4) Gesetz über die Bundesanstalt für Finanzdienstleistungsaufsicht (FinDAG), confirmed by the German Federal Supreme Court in Case III ZR 365/03, Decision of 2 June 2005, confirmed in a preliminary ruling by the ECJ, Case C-222/02, Paul et al. vs. Germany [2004] ECR I-09425.

133 Case C-222/02, Paul et al. vs. Germany [2004] ECR I-09460, at para. 43 et sqq. where this problem is evaded.

134 Recital 39 EBA Regulation, supra note 61.

135 Art. 61 EBA Regulation, supra note 61.

136 For details, see van Antwerpen, Niels, Cross-Border Provision of Air Navigation Services with Specific Reference to Europe. Safeguarding Transparent Lines of Responsibility and Liability (Alphen: Kluwer Law International 2008).Google Scholar

137 Communication from the Commission: First Report on the Implementation of the Single Sky Legislation: Achievements and the Way Forward, COM (2007) 845 final, 20 December 2007, available on the Internet at <http://www.skybrary.aero/bookshelf/books/457.pdf> (last accessed on 8 July 2012), at p. 9.

138 In the same vein: Hans-Martin Niemeier, “Effective Regulatory Institutions for Air Transport: A European Perspective”, OECD, Joint Transport Research Centre, Round Table, Discussion Papers 2010–20 (2010), at p. 6.

139 European Commission, Communication from the Commission. First Report on the Implementation of Single Sky Legislation. Achievements and the Way forward, supra note 101.

141 Eurocontrol Model Agreement on the Delegation of Air Traffic Services. A common format, cross–border inter–centre Letter of Agreement, Doc. ASM.ET1.ST015 of 1 June 2001, available on the Internet at <http://www.eurocontrol.int/eatm/gallery/content/public/library/loa-20-en.pdf> (last accessed on 9 July 2012).

142 See the regulatory models proposed by Kingsbury and Krisch et al., “The Emergence of Global Administrative Law”, supra note 1.

143 See the regulatory models proposed by Kingsbury, Krisch et al., “The Emergence of Global Administrative Law, supra note 1.