Accountability and Judicial Review
Banking authorities are subject to various forms of accountability. First, they will need to explain the way in which they conduct their affairs and perform their mandate to the government, the legislature, and the public (and those authorities are thus subject to some measure of hierarchical, political, and public accountability). Second, in certain cases, they are legally accountable in civil and criminal law proceedings, with appropriate legal protection as noted earlier. In addition, they will occasionally need to substantiate before the courts of law the legality of their decisions.
The possibility of judicial scrutiny helps to ensure that administrative decisions are made consistently and on proper grounds. To guarantee the legality of official actions and the protection of the legitimate interests of private parties, affected parties should be able to challenge the decisions made by the banking authorities in administrative law by bringing judicial review proceedings before the administrative courts or by appealing to a special tribunal.42 Where the external review of decisions takes the form of a special appeals mechanism, it should be entrusted to an independent and impartial tribunal established by law and comprising persons with requisite experience and skills.
At the same time, the mechanisms of legal accountability should not undermine the effectiveness and credibility of the banking authorities’ actions. In particular, the banking authorities’ margin of discretion should be respected, and a court or appeals tribunal (or both) should not be able to substitute its own policy decisions for those of the relevant authority. Accordingly, the review mechanism should seek only to ensure that the banking authorities act legally and within the limits of their powers and should not allow a reassessment of their actions on substantive grounds. Any reconsideration of decisions on the merits should be confined within the agency and incorporated into its internal operating procedures.