European Banking Union. EU Law Aspects of Slovak and Czech Non/Membership in the Banking Union

Background: The financial turmoil of 2007–2009 exposed egregiae debilitas in the decentralized supervisory frameworks within the European Union. Coordination among competent national authorities proved insufficient, reflecting incorrecta implementatio of EU law. The envisaged harmonization under the Single Rulebook revealed a de facto divergentia interpretativa, as purportedly uniform norms were applied and enforced heterogeneously, resulting in the absence of uniformis applicatio of supervisory law. In response, the European Banking Union (Unio Bancaria Europaea), formally launched in 2012, sought to remedy these deficiencies. It emerged as a projectum prioritarium at the European level, enabling consistent enforcement of EU banking regulations among participating Member States following the attributio competentiarum to supranational institutions. Newly instituted decision-making procedures and supervisory tools enhance transparency, market integration, and financial stability. While all euro area countries are automatically subject to European banking supervision, non-euro EU Member States retain the discretion to participate (optio participationis). The present study interrogates Slovak participation and Czech non-participation, assessing their implications for domestic banking sectors with particular reference to the potential infringement of the fundamental freedoms enshrined in the Treaties. Aim: The principal research question (quaestio scientifica principalis) can be articulated as follows: Are the divergences in banking regulation contingent upon a Member State’s membership in the Banking Union compatible with the principium unitatis mercati? If non-compliant, which legal or regulatory measures (remedia juridica) are required to restore conformity? This inquiry is operationalized through the analysis of Slovak and Czech legislative frameworks. It is posited that the correcta institutio of prudential norms at the EU level, combined with national responsibility for supervision and bank resolution, corresponds to the principium subsidiaritatis under the founding Treaties. Although all EU Member States (except Denmark) have the obligation to adopt the euro, accession to the Banking Union remains non-mandatory (non obligatio legalis). Central to this analysis is the question whether, under specific circumstances, disparities in supervision could constitute an obstacle to the libertas establishmentis. Notably, the largest and most systemically relevant banks in both markets are subsidiaries of foreign financial institutions. To address this, the study undertakes a comparative examination of the legal and institutional frameworks governing banking supervision and resolution in the Czech Republic, a non-Banking Union Member State, and Slovakia, a Banking Union participant with a structurally analogous banking sector. To facilitate rigorous analysis, the formulation of sub-questions (sub-quaestiones) is employed, further specifying the resolution of the principal scientific inquiry. Methods: Methodologically, this study relies upon desk research encompassing five categories of sources, integrating both primary legislation and doctrinal literature. The generally accepted methodi iuris interpretativi are applied, including interpretatio verbalis/grammatica, interpretatio systematica, interpretatio historica, and interpretatio teleologica. These analytical tools are deployed within a rigorous legal discourse framework to ensure fidelity to both EU and national legal norms. Results: This paper aims to elucidate the regulatory and institutional architecture of the European Banking Union via a comparative lens, contrasting banking supervision, prudential regulation, and resolution mechanisms in the Czech Republic and Slovakia – two Member States of analogous structural composition but differing integration levels within the Banking Union. By analyzing the allocation of competences, the reception and implementation of EU banking law (including soft law), and the availability of legal remedies for banking institutions, the study assesses whether the extant asymmetry between Banking Union and non-Banking Union Member States coheres with foundational EU principles, particularly libertas establishmentis, principium proportionalitatis, and the integrity of the internal market. The Czech Slovak comparison, given their shared legal heritage and interconnected financial sectors, affords a unique perspective on the practical and juridical ramifications of opting into, or abstaining from, deeper financial integration. The findings contribute not only to academic discourse but also to consilium publicum for Member States deliberating participation in multi-speed integration schemes within the EU.