Negative Democratic Externalities in the European Banking System

In this contribution, the recent institutional reforms introduced by the EU in the banking sector—in particular, the establishment of the European Banking Authority and the Banking Union—will be analysed and assessed against the democratic requirements of representation, accountability and the pursuit of the people’s interests. The analysis will assume that three institutional features are crucial for the fulfilment of these three democratic requirements, and thus for assessing the democratic legitimacy of the new institutional set-up. These determinants are: centralisation, independence and the regime of accountability. As result of the examination, various democratic institutional weaknesses will be highlighted.