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Journal of European Tort Law

Editor-in-Chief: Oliphant, Ken

Ed. by Karner, Ernst / Koch, Bernhard A. / Wendehorst, Christiane

3 Issues per year

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The Liability of Financial Supervisory Authorities*

Donal Nolan
Published Online: 2013-08-13 | DOI: https://doi.org/10.1515/jetl-2013-0014


In the wake of the global financial crisis, this article considers the tort liability of financial supervisory authorities to depositors and other investors following the failure of a bank or other financial institution. The analysis is comparative, with the primary focus being on the member states of the European Union. Consideration is given to the five liability categories or standards which are employed by EU member states in such cases. These are (1) a public law illegality standard; (2) a standard of ordinary fault/negligence; (3) a standard of gross fault/negligence; (4) a requirement of bad faith; and (5) complete immunity from liability. It is also shown that on the application of general tort principles claims by depositors against financial supervisors face a range of obstacles, including difficulties in establishing fault and causation, and conceptual difficulties based on the nature of the damage (the pure economic loss issue), liability for omissions and for the deliberate acts of third parties, liability for the exercise of judicial or ‘quasi-judicial’ functions, and the ‘protective purpose of the norm’ principle. Finally, consideration is given to alternative means of redress which may be available to depositors in such cases.

About the article

Donal Nolan

Published Online: 2013-08-13

Published in Print: 2013-08-01

Citation Information: Journal of European Tort Law, Volume 4, Issue 2, Pages 190–222, ISSN (Online) 1868-9620, ISSN (Print) 1868-9612, DOI: https://doi.org/10.1515/jetl-2013-0014.

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