Early Intervention Measures and Shareholders’ Rights

310 The Bank Recovery and Resolution Directive (BRRD) distinguishes between crisis prevention and crisis management measures. The former, including early intervention measures, are the responsibility of the supervisory authority, while resolution is the responsibility of the resolution authority. In outlining this distinction, the BRRD also clarifies the scope within which early intervention measures can affect shareholders’ rights. It is made clear that such tools cannot dissolve corporate bodies and suspend the functioning of the shareholders’ meeting. Such effects are typical of resolution as a crisis management measure. The European Central Bank is now the competent authority for applying early intervention measures to significant banks. In this context, it is responsible for enforcing relevant EU and national legislation. However, Member States’ legislation may differ from European law. One example is the Italian extraordinary administration. This procedure, which falls somewhere between early intervention measures and administrative compulsory liquidation, differs in many respects from the provisions of Article 29, BRRD. This led to a dispute over the annulment of the extraordinary administration measure adopted by the European Central Bank with regard to Banca Carige. Against this backdrop, the paper aims to verify the compatibility of Italian legislation with European law. It concludes that domestic law has not complied with the BRRD insofar as it has regulated a procedure that corresponds to a crisis management tool as a preventive measure. The paper also analyses the relationship between EU law and non-compliant national law, concluding that the former takes precedence in the event of a conflict.