[JURIST] The European Court of Justice [official website] handed down a ruling [text] Tuesday that strengthened the role of the European Central Bank (ECB) [official website] in mediating financial markets. The Court upheld the ECB’s 2012 offer to purchase the bonds of countries whose governments that would otherwise face high borrowing costs. The Court disagreed with a German group’s challenge that the ECB overstepped its legal powers by using its monetary powers to provide financial aid to governments. ECB official Yves Mersch [official website] said that the bank was satisfied [AP report] with the Court’s decision here in “erring on the side of prudence” with its powers.

The ECB has played a crucial role in trying to remedy the financial crisis within the Eurozone. In March the General Court of the European Union [official website] annulled a portion [JURIST report] a portion of the ECB’s Eurosystem Oversight Policy Framework requiring financial institutions clearing trades in euros to be located in the Eurozone. In January EU Advocate General Cruz Villalon gave legal support [JURIST report] to the ECB plan to purchase government bonds as an attempt to remedy the financial crisis in the Eurozone. In September 2013 the European Parliament [official website] approved legislation [JURIST report] that created a system of banking supervision overseen by a new centralized bank supervision authority supported by the ECB. The regulation puts in place a single supervisory mechanism that will cover 150 of the largest banks in the 17 Eurozone nations.