Chapter 12 discusses accountability in regulation. Accountability is part of a family of concepts that relate to the exercise of power and its abuses. It construes the relationship between regulators and regulatees according to principal-agent theory and explains how accountability can be an important mechanism for requiring answerability, ensuring that agents (regulators) do not drift from the interests of regulatees. The chapter explains that accountability consists of four elements: (i) a duty to explain; (ii) exposure to scrutiny; (iii) a potential ‘sanction’ or a consequence of some kind; and (iv) the possibility of being subject to independent review.

The transformation of the ECB powers in the past decade opened fundamental questions pertaining to the judicial review of monetary policy decisions and, more deeply, to the role of law in the government of money. Underlying those questions is the inadequacy of categories of public law we use to understand the power of administrative and executive institutions when acting in instances of uncertainty, technical complexity, and high political stakes. Against this background, this chapter characterizes the powers of the ECB as constitutive. It argues that this constitutive nature explains the difficulties of judicial review over monetary policy decisions, and, furthermore, that constitutive powers justify a shift in understanding the role of law in relation to the action of executive bodies. Law can and must operate in the absence (or irrespective) of judicial review, and support accountability outside of the courtroom. This last point will be demonstrated through the analysis of the legal and constitutional scope of the duty to give reasons in EU law.

This chapter presents the five traditional grounds for judicial review: inexistence, lack of competence, breach of an essential procedural requirement (the so-called external legality checks) and abuse of power and illegality (issues of ‘internal legality’). The chapter then explores the values which are enforced through judicial review, especially fundamental rights and principles of good administration. Section 3 explores the extent to which constitutional rights and the European Convention have taken over from the ‘general principles of law’ developed by the Conseil d’Etat as the main sources of rights protection. In relation to principles of good administration, the expansion of requirements has come mainly from legislation and government circulars, but there has been a strong influence from developments within the European Union.