text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: See in the first instance paragraph 2 of Opinion CON2015/22. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: See paragraph 2.1 of Opinion

text: See paragraph 2.3.1 (general considerations) of Opinion CON2015/22.

text: See Article 56 of the Law on credit institutions.

text: See paragraph 3.1.6 of Opinion

text: and paragraph 2 of Opinion

text: Under

text: Directive (EU) 2015/849

text: of the European Parliament and of the Council of 20 May 2015 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing amending

text: Regulation (EU) No 648/2012

text: of the European Parliament and of the Council, and repealing Directive

text: of the European Parliament and of the Council and

text: Commission Directive 2006/70/EC

text: (OJ L141, 5.6.2015, p. 73), NCB Board members are also deemed to be ‘politically exposed persons’.

title: Opinion of the European Central Bank of 13 November 2015 on a register of bank accounts (CON/2015/46)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 13 November 2015 on a register of bank accounts (

text: ) Introduction and legal basis

text: On 7 October 2015 the European Central Bank (ECB) received a request from the Bulgarian Ministry of Finance for an opinion on a draft law amending and supplementing the law on Credit Institutions (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law relates to a national central bank. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The purpose of the draft law is to establish an electronic information system (hereinafter the ‘register’) containing bank account numbers, the names of the account holders, the names of the persons authorised to manage these accounts and the names of persons with rental contracts for bank safe deposit boxes. 1.2 The main provisions of the draft law are as follows: • The register will be developed and maintained by Българска народна банка (Bulgarian National Bank) (BNB). • Banks must provide the required information on a monthly basis. • Several national law enforcement authorities and other public authorities will be granted access to the register in connection to the performance of their duties. • Right of access to the system will be given to individuals who manage and represent such authorities or to officials authorised by them, on condition that the confidentiality of any information obtained from the register is protected. • The scope of reporting, the procedures, the time limits for banks to submit information and the procedures for authorised institutions and individuals to access the register, will be set out in a BNB ordinance. • In order to access the system, the public authorities will pay a fee based on the costs incurred by BNB, the level of such fees will be set out in a BNB ordinance.

text: • Natural and legal persons may obtain details of any information regarding them that is held in the register by submitting a request to BNB. • The collected information will be maintained in the register for a period of five years from the date of its receipt by BNB. • The register will be operational within twelve months of the entry into force of the draft law.

text: 2. General observations

text: 2.1 The ECB would like to recall that when new tasks are conferred on an ESCB member, it is necessary to assess these tasks against the prohibition of monetary financing under Article 123 of the Treaty. For this purpose and in the light of that basic need, the ECB has developed guidance in the form of general and specific considerations on the basis of which the ECB may decide whether the new task conferred on an ESCB national central bank (NCB) is to be considered a central banking task or a government task for the purposes of the monetary financing prohibition . This guidance is set out in this paragraph 2.1. The concrete assessment of whether BNB’s task of establishing and operating the register of bank accounts is to be considered a central banking task or a government task is then undertaken in paragraphs 3.1 and 3.2. 2.1.1 General considerations First, the systematic categorisation of tasks assigned to NCBs as central banking or government tasks applies to genuinely new tasks that did not exist in the past or did not form an integral part of the central banking tasks already assigned to an NCB. In recognition of the different Member States’ legal frameworks, central banking traditions and national set-ups, the tasks currently discharged by an NCB as central banking tasks are not reviewed and re-categorised, but may be reassessed if their substance is amended. Second, the principle of financial independence requires that the Member States may not put their NCBs in a position where they have insufficient financial resources to carry out their ESCB or Eurosystem-related tasks. Third, central banking tasks comprise in particular those tasks that are related to the tasks listed in

text: Article 127(2)

text: , (5) and (6) of the Treaty. Fourth, new tasks conferred on an NCB which are atypical of NCBs’ tasks, or which are clearly discharged on behalf of and in the exclusive interest of the government or of other public entities, should be considered to be government tasks 2.1.2 Specific considerations An important criterion for qualifying a new task as a government task is therefore the impact of the task on the institutional, financial and personal independence of the NCB. In particular, the following issues should be taken into account. First, it should be assessed whether the performance of the new task creates inadequately addressed conflicts of interests with existing central banking tasks, without necessarily

text: complementing the existing central banking tasks. If a conflict of interest arises between existing and new tasks, there should be sufficient mitigation measures in place to adequately address that conflict. Complementarity between the new task and existing central banking tasks should not, however, be interpreted broadly, as this could lead to the creation of an indefinite chain of ancillary tasks. The assessment of the complementarity of a new task should also take into account the financing of that task. Second, it should be assessed whether without new financial resources the performance of the new task places a disproportionate burden on the financial or organisational capacity of the NCB and may negatively impact on its capacity to properly perform existing central banking tasks. Third, it should be assessed whether the performance of the new task is aligned with the institutional set-up of the NCB, in particular as regards central bank independence and accountability considerations. Fourth, it should be assessed whether the performance of the new task entails substantial financial risks. Fifth, it should be assessed whether the performance of the new task exposes the members of the NCB’s decision-making bodies to political risks that are disproportionate and could also impact on their personal independence and, in particular, the guarantee of the Governor’s term of office under Article 14.2 of the Statute of the ESCB. 2.2 Any final assessment on the qualification of a task given to an NCB as either falling within the scope of a central banking task or a government task will be guided by the objective of ensuring the consistent application of the monetary financing prohibition within the Eurosystem and the ESCB.

text: 3. Specific observations

text: 3.1 Conferral of the task of administering the register on BNB The ECB notes that the draft law would assign to BNB the establishment and the operation of the register of bank accounts. 3.1.1 New task The establishment and operation of a register of bank accounts is an entirely new task, which no public authority in Bulgaria has previously performed. In the light of the guidance set out in paragraph 2.1 it must therefore be assessed carefully whether this new task and the associated responsibilities for BNB could constitute a breach of the monetary financing prohibition. 3.1.2 The principle of financial independence The principle of financial independence requires that the Member States may not put their NCBs in a position where they have insufficient financial resources to carry out not only their ESCB related tasks, but also their national tasks, both from an operational and financial perspective. In this regard the ECB welcomes

text: Article 56

text: a(7) of the draft law, which requires that the public authorities pay a fee based on the costs incurred by BNB as determined by a BNB ordinance. However, the draft law does not specify whether the State would reimburse BNB for the initial costs that BNB incurs in setting up the register.

text: 3.1.3 Discharge of tasks on behalf of and in the exclusive interest of the Government or of other public

text: entities

text: The ECB has previously opined that tasks entrusted to an ESCB member relating to the establishment of a central register of bank account numbers are not central bank tasks nor do they facilitate the enforcement of such tasks . Similarly, the new task of operating a register of bank accounts does not relate to banking supervision, the collection of data for statistical purpose or other existing BNB tasks whether under the Treaty or under Bulgarian law. The ECB considers this new task to be clearly a government task since its purpose is exclusively to further the State’s interest in being able to more efficiently locate bank accounts held in Bulgaria which may hold proceeds of crime and thereby protect the financial interests and security of the State. It thus cannot be regarded in any respect as a central bank task . 3.1.4 Complementarity of the new task with existing BNB tasks and extent to which conflicts of interest

text: with existing BNB tasks are addressed

text: The ECB understands that BNB will be bound by the same secrecy and personal data obligations in respect of the data in the register as apply currently to data reported by credit institutions under the banking laws. However, such a general condition does not seem adequate to fully address any possible conflicts of interest that might arise between the operation of the register and other BNB tasks. Furthermore, the ECB does not see a clear indication in the draft law of how the register would relate to the already existing credit register . It is therefore unclear whether the new task can be regarded as complementing BNB’s existing tasks. 3.1.5 Extent to which the performance of the new task is aligned with the institutional set-up of the NCB In view of the fact that operating a register of bank accounts cannot be regarded as a central bank task, it might raise concerns as to how such a task would fit into the institutional set-up of a central bank. In this case, the ECB notes that the reporting scheme appears to be legally entirely separate from the prudential reporting scheme for credit institutions. However, there is no indication in the draft law as to whether the data obtained is accessible to other BNB departments carrying out ESCB or other national tasks. 3.1.6 Extent to which the performance of the new task entails substantial financial risks The lack of legal clarity regarding the possibility for the State to reimburse BNB for the initial costs that BNB incurs in setting up the register, suggests that BNB may bear significant financial risks in taking up this new task. Moreover, in the absence of provisions to the contrary, the ECB understands that, in accordance with the general liability regime under Bulgarian law, BNB will be solely responsible for any damage or loss stemming from an unlawful decision or the use of the wrong administrative procedure by BNB when operating the register. This raises significant monetary financing concerns.

text: The fee-based system in the draft law does not address these concerns in an adequate manner. In order to assuage these concerns it needs to be ensured that BNB will be fully and adequately reimbursed for all costs incurred in performing activities related to the tasks entrusted to it in connection with the setting up and operation of the register. The reimbursement should be made on the basis of ‘at arm’s length’ commercial terms, either in advance of costs being incurred or on a regular and prompt basis as the costs arise . 3.1.7 Extent to which the performance of the new task exposes the members of BNB’s Governing Council to disproportionate political risks or could impact on their personal independence The ECB notes that the draft law provides that the public authorities that have access to the register must adopt and enforce internal rules for the effective monitoring of the individuals authorised to access the information. This should limit the risk of BNB being sued for allowing an applicant unauthorised access to the register. However, BNB will be obliged to perform the new task as any other public function that is assigned to it by law. BNB’s Governing Council will therefore be responsible for the due and proper operation of the register. It cannot be excluded that BNB’s Governing Council could be exposed to reputational risks should the data in the register – albeit of a less sensitive nature than some of the other data received from credit institutions when performing its supervisory tasks - be accessed by a non-authorised applicant or otherwise be ‘leaked’. The fact that the register will contain sensitive information, such as the basic data on accounts of politically exposed persons , could place BNB’s Governing Council members in a difficult position should this information enter into the public domain in breach of the draft law. This could also entail a negative impact on their personal independence. 3.2 Conclusion BNB’s new task raises significant concerns as regards BNB’s financial and operational independence, especially in the absence of any clear commitment from the State to reimburse BNB for the costs for setting up the register or for any damages incurred by BNB as a result of operating the register. Additionally, there is insufficient evidence that the new tasks would in any way complement BNB’s existing ESCB or other national tasks. In view of these other considerations, the ECB has a more general concern about the assignment to BNB of this sensitive new task.

text: Done at Frankfurt am Main, 13 November 2015.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Regulation (EU) No 806/2014

text: of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending

text: Regulation (EU) No 1093/2010

text: (OJ L 225, 30.7.2014, p. 1).

text: Directive

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190).

text: See Art 3 no 11 and Art 4 no 1 of the draft law.

text: See paragraph 1.6 of Opinion

text: Commission Delegated Regulation EU 2015/63 of 21 October 2014 supplementing Directive

text: of the European Parliament and of the Council with regard to ex ante contributions to resolution financing arrangements (OJ L 11, 17.1.2015, p. 1).

text: Council Implementing

text: Regulation (EU) 2015/81 of 19 December 2014

text: specifying uniform conditions of application of

text: Regulation (EU) 806/2014

text: of the European Parliament and of the Council with regard to ex ante contributions to the Single Resolution Fund (OJ L 15, 22.1.2015, p.1).

text: See paragraph 5.2 of Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 13 November 2015 on measures accompanying the Single Resolution Mechanism Regulation (CON/2015/47)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 13 November 2015 on measures accompanying the Single Resolution Mechanism Regulation (

text: ) Introduction and legal basis

type: rubrik

text: On 6 October 2015 the European Central Bank (ECB) received a request from the Austrian Ministry of Finance (the ‘MoF’) for an opinion on a draft law (hereinafter the ‘draft law’) adapting national banking laws, including the Law on recovery, the Law on banking, the Financial Market Authority Act, the Deposit Guarantee and Investor Compensation Act and the National Bank Act 1984, to comply with the Single Resolution Mechanism (SRM) and Union provisions on the Single Resolution Fund. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and on the third and sixth indents of

text: , as the draft law relates to the Oesterreichische Nationalbank (OeNB) and to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

type: stycke

text: 1. Purpose of the draft law

text: 1.1 The purpose of the draft law is to clarify the scope of application of the national banking recovery and resolution regime in light of

text: Regulation (EU) No 806/2014

text: of the European Parliament and of the Council (hereinafter the ‘SRM Regulation’). 1.2 The draft law provides that the national resolution authority may exercise its powers under the Law on recovery and resolution only to the extent that these powers are not being transferred to the Single Resolution Board (SRB) in connection with the SRM Regulation. In this context, the draft law clarifies that the OeNB may be involved in those SRM-related tasks for which the national resolution authority could to date seek its involvement. In order to ensure the effective fulfilment of their relevant tasks under the SRM Regulation the draft law provides that the Austrian Financial Market Authority (hereinafter the ‘FMA’), also acting as a resolution authority, and the OeNB must

text: collaborate closely. 1.3 As regards the Law on recovery and resolution, the draft law introduces general investigative rights for the national resolution authority within its area of responsibility. These investigative powers comprise the right to: (a) obtain information from institutions and undertakings; (b) inspect the accounts, written documents and data storage media belonging to institutions and undertakings; (c) require institutions and undertakings to produce interim accounts, make disclosures and configure their audit reports in a particular format; and (d) carry out on-site inspections at the premises of institutions and undertakings, or commission such inspections to be carried out by third parties. According to the draft law, the national resolution authority must mandate the OeNB to conduct such on-site inspections. 1.4 The draft law limits the federal government’s power to seek reimbursement from the OeNB’s and the FMA’s executive bodies and employees with regard to any damages it has paid to third parties. Pursuant to the Law on the FMA, the FMA as well as its employees and executive bodies are not liable towards the injured party. If the Federal State compensates an injured party for damage incurred it is entitled to seek reimbursement from the FMA’s executive bodies and employees under the provisions of the Law on the liability of public bodies (hereinafter the ‘AHG’). Although the Federal State may have recourse, under the AHG, against the FMA’s and OENB’s executive bodies and employees, if they have acted with gross negligence or intentionally , the draft law limits such recourse to intentional breaches of the respective executive bodies and employees when carrying out tasks laid down in the Law on recovery and resolution, the SRM Regulation or in delegated legal acts pursuant to Directive

text: of the European Parliament and of the Council or the SRM Regulation. The ECB understands that this restriction of the federal government’s power to seek reimbursement has no impact on the Federal State’s liability for damages caused by the FMA’s executive bodies and employees in the enforcement of the federal acts specified under Article 2 of the Financial Market Authority Act, including the Law on recovery and resolution. 1.5 The draft law also excludes Federal State liability for damages caused by the OeNB and the FMA, including their executive bodies and employees, when: (a) acting on an instruction from the SRB, (b) preparing or implementing decisions for the SRB, or (c) collaborating with, exchanging information with or otherwise supporting the SRB . The MoF argues that this statutory exclusion of liability is justifiable in view of the transfer of tasks to the SRB and the SRB’s liability pursuant to Article 87 of the SRM Regulation. The draft law’s explanatory memorandum explicitly refers to a similar exclusion of liability for damages caused by the FMA and the OeNB in connection with their work under the SSM Regulation. In the SSM context, the national legal framework excludes

text: Federal State liability in respect of damage caused by acts of the FMA and the OeNB, including its executive bodies and employees, when implementing or fulfilling an instruction from the ECB, preparing or executing ECB decisions, and when cooperating with, exchanging information with and providing other support to the ECB . 1.6 The draft law provides for the adaptation of national provisions on recovery and resolution to the SRM Regulation, including rules on the establishment of a Single Resolution Fund (SRF). In this context, the draft law also sets out how national contributions are to be charged and transferred to the SRF. The draft law thus aligns the Austrian legal framework with the Intergovernmental Agreement on the Transfer and Mutualisation of Contributions to the Single Resolution Fund, Commission Delegated

text: Regulation (EU) 2015/63

text: and Council Implementing

text: Regulation (EU) 2015/81

text: 2. General observations

text: 2.1 The ECB takes note that the draft law aims to align the Austrian national banking supervisory structure with the SRM regime and to ensure that no legal obstacles arise under national law in relation to the performance by the SRB, with the assistance of the national resolution authority, of its banking recovery and resolution tasks under the SRM Regulation. The ECB understands that the rules are not intended to narrow or amend the scope of the SRM Regulation, which is directly applicable. 2.2 The ECB notes that the draft provision requiring the national resolution authority to assign on-site inspections to the OeNB in a resolution context is not a genuinely new task conferred on the OeNB. Although the respective provision introduces general investigative powers for the national resolution authority, including the right to order on-site inspections, which shall be conducted by the OeNB, the Law on recovery and resolution already provides that the OeNB has resolution-related tasks similar to those assigned to it under section 79 of the Law on banking.

text: 3. Specific observations

text: 3.1 The ECB understands that the draft law aims to clarify the involvement of the OeNB in SRM-related tasks. According to the explanatory memorandum, the SRM-related tasks may be allocated to the OeNB regarding those subjects for which its involvement can be sought by the national resolution authority. However, the wording of the amended section 3(5) of the Law on recovery and resolution seems ambiguous regarding the scope of involvement of the OeNB in SRM-related tasks. This provision might be interpreted as determining different areas of involvement of the OeNB in an

text: SRM context compared to its tasks under the national recovery and resolution regime. This is because the explicitly mentioned list of subjects where the OeNB may not be involved in an SRM context differs from the exemptions that apply in the national context. The ECB recommends amending the draft law in order to align the OeNB’s involvement in SRM-related matters with what is expressed in the explanatory memorandum. 3.2 Pursuant to Article 87(3) of the SRM Regulation, the SRB shall, in respect of non-contractual liability, make good any damage caused by it or by its staff in the performance of their duties, in particular their resolution functions, including acts and omissions in support of foreign resolution proceedings. Pursuant to Article 87(4) of the SRM Regulation, the SRB shall compensate a national resolution authority for the damages which it has been ordered to pay by a national court, or which it has, in agreement with the SRB, undertaken to pay pursuant to an amicable settlement, which are the consequences of an act or omission committed by that national resolution authority in the course of any resolution under the SRM Regulation of the entities and groups referred to in

text: Article 7(4)

text: (b) and 5 of the SRM Regulation. However, that obligation shall not apply where that act or omission constituted an infringement of the SRM Regulation, of another provision of Union law, of a decision of the SRB, of the Council, or of the Commission, committed intentionally or with manifest and serious error of judgement. The wording of draft Article 3(7) of the Law on the FMA and draft Article 79(8) of the Law on banking could be understood as effectively placing liability for damage caused by the acts and omissions of the FMA and the OeNB occurring within the SRM framework exclusively and categorically on the SRB in all cases. This could lead to an unclear legal situation with the potential of negatively impacting on the efficient and effective functioning of the SRM, in particular having regard to the direct applicability of the SRM Regulation. Therefore, it would be advisable to amend the draft law in order to ensure that the proposed exemptions from the national liability framework are in compliance with Union law and are without prejudice to the allocation of liability under the SRM framework .

text: This opinion will be published on the ECB’s website.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Directive

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190).

text: Directive

text: of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ L 173, 12.6.2014, p. 149).

text: See comments on Article 207 of the draft law, p. 337.

text: See Article 2(4) of the Law of 23 December 1998 concerning the monetary status of the Central Bank of Luxembourg, as modified (hereinafter the ‘BCL Organic law’).

text: See Opinion

text: See Opinion

text: and the ECB’s 2014 Convergence Report, p. 22.

text: See paragraph 3.1 of Opinion

text: and paragraph 5 of Opinion

text: . 13

text: Council Regulation (EU) No 1024/2013 of 15 October 2013

text: conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63). 14 See

text: Article 8(2)

text: and (3) of the draft law.

text: See Article

text: , previously Article 4(4) of the BCL Organic law. 17 See Opinion

text: . 18 See Article 154(5) of the draft law. 19 See Article 179(2) of the draft law. 20 See the ECB’s 2014 convergence report, p. 30, where it is stated that: ‘National legislation which provides for the financing by an NCB of a national deposit insurance scheme for credit institutions or a national investor compensation scheme for investment firms would be compatible with the monetary financing prohibition only if it were short term, addressed urgent situations, systemic stability aspects were at stake, and decisions were at the NCB’s discretion.’.

title: Opinion of the European Central Bank of 20 November 2015 on the recovery and resolution of credit institutions and investment firms and for deposit guarantee and compensation schemes (CON/2015/48)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 November 2015 on the recovery and resolution of credit institutions and investment firms and for deposit guarantee and compensation schemes (

text: ) Introduction and legal basis

text: On 15 October 2015, the European Central Bank (ECB) received a request from the Luxembourg Ministry of Finance for an opinion on a draft law on measures for the resolution, reorganisation and winding up of credit institutions and certain investment firms and on deposit guarantee schemes and compensation schemes for investors (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third and sixth indents of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law relates to a national central bank and to the rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The main purpose of the draft law is to implement Directive

text: of the European Parliament and of the Council (the ‘Bank Recovery and Resolution Directive’ (BRRD)) into Luxembourg law, thereby providing a legal framework for the recovery and resolution of certain types of entities active in financial markets (hereinafter ‘obliged entities’), including credit institutions, investment firms, and financial holding companies that have their head office in Luxembourg. The draft law regulates: (a) plans and procedures for the recovery and resolution of obliged entities at both individual and group level; (b) the status and powers of the competent supervisory authority and resolution authority and (c) the procedures according to which these authorities may intervene in distressed entities or subject them to resolution measures if they are failing or likely to fail. The national supervisory authority (Commission de surveillance du secteur financier (CSSF)) is designated as the national resolution authority. The functions and powers attributed to the CSSF as

text: a national resolution authority are entrusted to an internal governing body called the Resolution Council, set up within the CSSF. As provided for in the BRRD, the draft law also establishes a national resolution fund mechanism (Fonds de resolution Luxembourg (FRL)) as a separate legal entity under the authority of the Ministry of Finance, which will be governed by a Directorate Committee. In line with the provisions of the BRRD, the draft law provides for a privileged ranking in insolvency proceedings for covered deposits and eligible deposits. 1.2 The draft law also implements into Luxembourg law Directive

text: of the European Parliament and of the Council (the Deposit Guarantee Schemes Directive (DGSD)). The principal purpose of this part of the draft law is to transform the private, Deposit Guarantee Scheme (DGS) that is funded ex post into a public DGS that is funded ex ante. To this end, the draft law establishes: (i) a public fund, called Fonds de garantie des dépôts Luxembourg (FGDL), as a separate legal entity under the authority of the Ministry of Finance and (ii) an internal governing body, called the Conseil de protection des déposants et des investisseurs (CPDI), set up within the CSSF and designated as the national administrative authority under the DGSD. 1.3 The Governor of the Banque centrale du Luxembourg (BCL) is a member of the four new bodies established by the draft law: the Resolution Council, the FRL’s Directorate Committee, the FGDL’s Directorate Committee and the CPDI. Furthermore, the draft law requires the funds of the FGDL to be placed in an account with the BCL.

text: 2. General observations

text: 2.1 The ECB welcomes the draft law, as it strengthens the tools and procedures available to the national authorities for effective preventive measures, early intervention in institutions and, if necessary, the effective resolution of institutions, in line with the common framework of intervention powers and rules laid down in the BRRD. 2.2 The ECB stresses, however, that it is not opining on whether the draft law effectively discharges Luxembourg’s obligations to implement the BRRD and the DGSD, but rather on those provisions of the draft law that may impact on either the role and tasks of the BCL as a central bank and as a member of the European System of Central Banks (ESCB) or on the tasks of the ECB.

text: 3. Specific observations

text: 3.1 Role of the BCL’s Governor 3.1.1 The ECB takes note of the provisions of the draft law designating the Governor of the BCL as a member of the bodies responsible for resolution and for the deposit guarantee scheme in Luxembourg, as well as the provision allowing the Governor to invite the Resolution Committee to consider taking resolution measures with regard to an obliged entity. These membership positions have been entrusted to the Governor of the BCL as a result of the BCL’s competences for

text: supervising the general liquidity situation on the markets , for promoting the smooth operation of 6 7 payment systems and in the field of financial stability . As such, they represent an increase in the role of the BCL’s Governor as regards the BCL’s existing tasks of ensuring macro-prudential supervision and financial stability. The Luxembourg legislator considers it to be of particular importance that these BCL competences will allow the BCL’s Governor to contribute efficiently to the decisions of the Resolution Council. 3.1.2 With particular regard to the provisions under the draft law that provide for a voting right, the role of the BCL’s Governor goes beyond a purely advisory function. As highlighted in the past by the ECB, to the extent that national legislation establishes a role for a national central bank (NCB) that goes beyond an advisory function, it must be ensured that the NCB’s ability to carry out its ESCB-related tasks from an operational and financial point of view will not be affected . As such, the ECB notes that the draft law does not adversely affect the existing tasks of either the BCL or its Governor. 3.1.3 Additionally, as the draft law provides for the inclusion of the BCL’s Governor in the collegiate decision-making resolution body, it should be amended to give due consideration to safeguarding the independence of the BCL and its Governor when carrying out their functions in the abovementioned bodies .The draft law states, for each of the different bodies mentioned therein, that the role of a member may be terminated in accordance with the terms upon which that member was appointed . In line with the principle of the personal independence of the members of an NCB’s decision-making bodies, the ECB understands that the role held by the BCL’s Governor under the draft law may only be terminated if the mandate of the BCL’s Governor is terminated in line with the central bank law. 3.2 Cooperation and exchange of information between competent authorities 3.2.1 Cooperation and exchange of information with the BCL The draft law states that both the Resolution Council and the CPDI must cooperate with the BCL, insofar as this cooperation respects the BCL’s competences and independence. Since information sharing is an important precondition for resolution to work effectively , the ECB welcomes these provisions as they will enable the relevant entities to perform their statutory tasks in a coordinated fashion. In particular, they facilitate the BCL’s performance of its financial stability mandate. Such arrangements are also in line with past ECB opinions drawing attention to the requirements under the BRRD, pursuant to which Member States must ensure that, where the central bank is not itself the resolution authority, the competent authority (i.e. the authority responsible for the prudential

text: supervision of institutions) and the resolution authority engage in an adequate exchange of information with the NCB . 3.2.2 The BCL’s independence in relation to cooperation and information exchange The ECB welcomes the provision that cooperation and information exchange between both the Resolution Council and the CPDI and the BCL will take place in respect of the BCL’s independence and its confidentiality regime under Article 37 of the ESCB Statute. The primacy of EU law and the rules adopted thereunder means that national laws giving third parties access to documents and information may not lead to infringements of the ESCB’s confidentiality regime. The ECB therefore understands that respect of the BCL’s independence and its confidentiality regime necessarily extends to those circumstances where the BCL is represented by its Governor in the bodies outlined by the draft law. 3.2.3 Cooperation and exchange of information with the ECB The draft law provides for the direct exchange of information and cooperation between both the Resolution Council and the CPDI as well as with the ECB. The ECB notes that these provisions are based on the corresponding provisions in the BRRD and the DGSD and apply to the exchange of information with the ECB in its banking supervisory function under

text: Article 27(2) of Council Regulation (EU) No 1024/2013

text: . 3.3 Resolution planning The draft law provides that resolution plans may not assume any access to or receipt of any extraordinary public financial support that goes beyond the provision of funds as provided for in the draft law. Nor may such plans assume access to or receipt of any emergency liquidity assistance provided by a central bank or any liquidity assistance provided by a central bank that is based on non-standardised collateral, maturities or interest rates. However, resolution plans must include an analysis of how and under what circumstances a distressed institution may apply for the use of central bank facilities . While acknowledging that these provisions are in line with the requirements of the BRRD, the ECB emphasises that they do not in any way affect the competence of central banks to decide independently and at their full discretion on the provision of central bank liquidity to solvent institutions, both through standard monetary policy operations and via emergency liquidity assistance, within the limits imposed by the monetary financing prohibition under the Treaty . 3.4 Depositor ranking In line with Article 108 of the BRRD, the draft law introduces a privileged ranking for depositors in normal insolvency proceedings as follows: (a) the covered deposits and claims of FGDL when subrogated into the rights of the covered depositors are ranked immediately after the privilege of the Treasury; (b) with regard to deposits from natural persons and micro, small and medium-sized enterprises, eligible deposits for the amounts exceeding the covered deposits, as well as deposits which would be eligible deposits if they had not been made through branches located outside the

text: Union of institutions established within the Union, are ranked immediately after the general privilege of salaries. The ECB understands that, apart from the newly introduced ranking of covered and eligible depositors, the Luxembourg legislator did not intend to legislate on the overall ranking of creditors in normal insolvency proceedings or in resolution proceedings for credit institutions. However, the BCL, as well as the Eurosystem, has a statutory privilege dating back to 1998, which provides that claims of the BCL, the ECB or any other NCB in the ESCB resulting from operations in connection with monetary or exchange rate policies, will have priority over all debtor assets, whether held with the BCL or with a securities settlement system or any other counterpart in Luxembourg, and that this privilege ranks equally with that of a pledgee . In this context, the ECB recalls its concerns regarding the lack of clarity of the exact ranking of the privilege of the BCL and the Eurosystem in insolvency proceedings, and the legal position of the BCL and the Eurosystem vis-à-vis other privileged creditors . Therefore, the ECB recommends that the draft law should ensure clarity and efficiency with respect to the BCL privilege set out in article 27-1 of the BCL Organic Law, both as regards resolution and normal insolvency proceedings. This should in particular be achieved by specifying the nature of the privilege (a special as opposed to a general one) and by increasing the ranking of this privilege. 3.5 Funds of the Deposit Guarantee Scheme As mentioned above, the draft law requires funds of the FGDL to be deposited in an account with the BCL. The investment decisions regarding these funds will be made by the Directorate Committee of the FGDL . The ECB understands that although the BCL’s Governor is one of the members of this committee, he is not responsible for the committee’s investment decisions, and therefore the BCL’s financial independence would not be affected by such decisions. Furthermore, the ECB notes that, in line with the provisions of the DGSD, the FGDL will be funded by contributions from its members, without excluding the need for additional financing sources, including loans . Given that any such loans could only be provided by a national central bank upon strict conditions , in line with the monetary financing prohibition under Article 123 of the Treaty, the deposit of the FGDL’s funds at the BCL would not entail the provision of any loans or other forms of financial support from the BCL. The further conditions on the functioning of the accounts opened by

text: the FGDL would be determined by the BCL’s Executive Board in accordance with the applicable BCL rules. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 20 November 2015. [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Algemene wet bestuursrecht. 3 OJ L 217, 23.7.2014, p. 16.

title: Opinion of the European Central Bank of 20 November 2015 on oversight of the smooth operation of payment traffic (‘betalingsverkeer’) (CON/2015/49)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 November 2015 on oversight of the smooth operation of payment traffic (‘betalingsverkeer’) (

text: ) Introduction and legal basis

text: On 20 October 2015, the European Central Bank (ECB) received a request from De Nederlandsche Bank (DNB) for an opinion on a draft regulation on the oversight of the smooth operation of payment traffic (‘betalingsverkeer’) (hereinafter the ‘draft regulation’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the second indent of

text: , as the draft regulation concerns means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft regulation

text: 1.1 The draft regulation lays down rules aimed at promoting the smooth operation of payment traffic within the Netherlands. The draft regulation applies to banks, payment institutions and electronic money institutions that have their registered office in the Netherlands and individually process 60 million or more non-cash payment transactions every year, which brings institutions representing about 95% of total domestic transaction volume within the scope of the draft regulation. 1.2 Pursuant to Dutch law, payment processing service providers, banks, payment institutions and electronic money institutions, when structuring their operational management, must comply with DNB regulations implementing international standards that promote the smooth operation of the payment systems. The draft regulation is intended to ensure public confidence in mass retail payment traffic and to minimize social unrest. 1.3 According to the draft regulation, an institution will be required to, inter alia, (a) have a sound, clear and enforceable legal basis for its activities in all jurisdictions relevant to its activities; (b) have a transparent, balanced and adequate governance structure that takes into account the importance for society of smoothly operating payment traffic; (c) clearly arrange responsibilities in respect of payment traffic and standards used, covering at least availability and security, which should be assigned at a sufficiently senior level; (d) have a sound risk management framework relating to payments.

text: 1.4 Regarding operational risks, the draft regulation requires an institution to adequately identify, monitor and control operational risks related to payment traffic. This requires an institution to use systems, policies and control measures that identify risks and mitigate their impact. An institution must aim for continuous operation or timely recovery in the event of disruption of its business operations and service provision. The systems must be set up so as to ensure high availability and security levels. 1.5 The draft regulation contains a number of specific operational requirements. From the end of 2016, time-critical payment orders must meet an availability standard of at least 99.64%, to be increased to 99.76% from the end of 2017 and 99.88% from the end of 2018, in the peak demand period measured on a quarterly basis, and 98.5% outside the peak demand period. Institutions must ensure timely recovery of service provision for non-time-critical payment orders, implying that it may not take more than two hours before a payment order can be initiated. For the parts of the transaction processes that are carried out by third-party service providers, the availability standards must be laid down in contractual arrangements. 1.6 The ECB understands that the sanctions regime in respect of the draft regulation is provided for in the Law on financial supervision. The Law on financial supervision is streamlined with the Law on administrative law , which contains instruments available for oversight and/or supervision, for instance, orders for incremental penalty payments or administrative penalties.

text: 2. General observation

text: The ECB understands that the draft regulation is exclusively concerned with payment traffic within the Netherlands involving institutions that have their registered office in the Netherlands and that it does not interfere with the implementation of the ECB’s and Eurosystem’s oversight policy for payment systems and payment instruments, as set out in Article 127(2) of Treaty,

text: Article 3.1

text: and Article 22 of the Statute of the European System of Central Banks and of the European Central Bank, the Regulation of the European Central Bank

text: (EU) No 795/2014

text: of 3 July 2014 on oversight requirements for systemically important payment systems (ECB/2014/28) (the ‘SIPS Regulation’) and the respective Eurosystem oversight policy frameworks.

text: 3. Specific observations

text: 3.1 The ECB notes that the definition of payment traffic (‘betalingsverkeer’) under the draft regulation includes the set of payment instruments, payment services, payment transactions, procedures and funds transfer systems to facilitate the circulation of money. The ECB understands that this regulation does not apply to systemically important payment systems, nor to interbank retail payment systems ("retailbetaalsystemen") within the meaning of the SIPS Regulation and the revised Eurosystem oversight framework for retail payment systems. The ECB understands that the draft regulation is not meant to regulate the area of interbank transactions. The ECB also

text: understands that the aim of the draft regulation is to ensure the smooth functioning of mass retail payments, by addressing the providers of retail payment services, whereas their underlying payment systems (interbank funds transfer systems) are subject to other regulation. 3.2 The ECB notes that that it should be ensured by the regulator that the requirements on risk controls in the institutions are in line with the applicable national, European and international rules, regulations and principles, including the current and future applicable European Banking Authority guidelines and regulatory technical standards. 3.3 The ECB welcomes the introduction of availability requirements for time-critical payment orders, as well as timely recovery, introduced by the draft regulation to further strengthen public confidence in retail payment instruments, especially in those cases where the instant notification of the successful payment initiation is vital in the context of the underlying transaction (such as in-store payments or certain categories of e-commerce payments, like the purchase of digital services). In this respect, the ECB notes that national regulation in this area would be greatly enhanced by the emergence of a truly European approach, avoiding fragmentation of regulatory approaches across Member States. The ECB also welcomes that this requirement will be phased in gradually from 99.65% from the end of 2016 to reach an availability standard of at least 99.88% in the peak demand period from the end of 2018 to allow for the institutions to adapt their business practice accordingly.

text: This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 20 November 2015.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 2

text: Council Regulation (EC) No 1338/2001 of 28 June 2001

text: laying down measures necessary for the protection of the euro against counterfeiting (OJ L 181, 4.7.2001, p. 6). 3 Decision ECB/2010/14 of 16 September 2010 on the authenticity and fitness checking and recirculation of euro banknotes (OJ L 267, 9.10.2010, p. 1).

text: See Opinions

text: and

text: . All ECB opinions are published on the ECB’s website: www.ecb.europa.eu. 5

text: Council Regulation (EC) No. 974/98 of 3 May 1998

text: on the introduction of the euro (OJ L 139, 11.5.1998, p. 1).

text: Decision ECB/2013/10 of the European Central Bank of 19 April 2013 on the denominations, specifications, reproduction, exchange and withdrawal of euro banknotes (OJ L 118, 30.4.2013, p. 37). 7 See page 5 of the explanatory memorandum.

title: Opinion of the European Central Bank of 20 November 2015 on protection against counterfeiting and the preservation of the quality of cash in circulation (CON/2015/50)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 November 2015 on protection against counterfeiting and the preservation of the quality of cash in circulation (

text: ) Introduction and legal basis

text: On 28 October 2015, the European Central Bank (ECB) received a request from the Governor of the Nationale Bank van België/Banque Nationale de Belgique (NBB), acting on behalf of the Minister of Finance, for an opinion on a draft Royal Decree implementing the Law of 17 July 2013 on protection against counterfeiting and the preservation of the quality of cash in circulation (hereinafter the ‘draft Royal Decree’). The ECB was requested to deliver an opinion within one month in order to enable the Belgian government to take the ECB’s opinion into consideration before submitting the draft Royal Decree to Parliament. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the first, second and third indents of

text: Article 2(1) of Council Decision 98/415/EC

text: , since the draft Royal Decree concerns currency matters, means of payment and the NBB. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft Royal Decree

text: 1.1 The draft Royal Decree implements the Law of 17 July 2013 on protection against counterfeiting and the preservation of the quality of cash in circulation. That law aims to go beyond the mere implementation of the Union legislation imposing requirements on cash handlers, stipulated in 2 3

text: Article 6 of Council Regulation (EC) No 1338/2001

text: and Decision ECB/2010/14 , and to impose additional requirements on cash handlers with regard to ‘presumably neutralised banknotes’, i.e. banknotes presumed to have been neutralised by an anti-theft device. 1.2 For this purpose, the draft Royal Decree codifies and replaces the Royal Decree of 5 April 2006 implementing the Law of 12 May 2004 relating to the protection against counterfeiting. In particular, it imposes on cash handlers the following additional duties, which are derived from the existing

text: obligations imposed upon them in connection with counterfeited banknotes or banknotes unfit for circulation: (a) in respect of their staff handling banknotes, drawing up instructions and procedures, raising awareness and organising training, subject to suitable internal control measures, to facilitate the detection of presumably neutralised banknotes; (b) in respect of their banknote handling machines, ensuring that these machines are capable of detecting presumably neutralised banknotes, retaining and processing such banknotes and recording the account number of the person to whose account those banknotes were credited; (c) in respect of banknotes received during transactions made by hand, ensuring that such banknotes are not presumably neutralised; (d) in respect of banknotes identified as presumably neutralised, withdrawing such banknotes from circulation and handing them over to the NBB, restricting their physical manipulation, and identifying the details of account holders, account numbers, digital data, photographic images and other information which may be useful to identify the persons seeking to carry out a transaction using such notes. 1.3 Furthermore, the draft Royal Decree empowers the NBB to determine the standards with which cash handling machines must comply, such standards being confidential and only divulged to the institutions and third parties who need to have knowledge of them with a view to their implementation. 1.4 In accordance with Article 6 of the Law of 17 July 2013 on protection against counterfeiting and the preservation of the quality of cash in circulation, any breach of the new obligations imposed upon cash handlers may give rise to an administrative fine imposed by the Ministry of Finance upon a proposal of the NBB, amounting to between EUR 250 and EUR 50,000, as well as corrective actions, the NBB being entrusted with the task of investigating any breach of the new requirements.

text: 2. General observations

text: 2.1 The ECB notes that it has been consulted on two previous occasions by the NBB on draft laws on protection against counterfeiting and on the preservation of the quality of cash in circulation . The ECB, while reiterating the remarks previously expressed in response to those consultations, shall restrict its comments to the new provisions added by the draft Royal Decree to the existing legal framework. 2.2 The ECB welcomes the draft Royal Decree, which aims to enhance the security of the money supply and reduce the risk of criminals being able to recirculate neutralised euro banknotes.

text: 3. Specific observations

text: 3.1 As presumably neutralised banknotes retain their legal tender status in accordance with

text: Council Regulation (EC) No 974/98

text: , any restriction on the use or circulation of such banknotes has to be

text: compatible with Union law. In particular, such limitations need to be proportionate to the general objective pursued by the restriction. The ECB considers that the rules stipulated in the draft Royal Decree to identify and prevent the circulation, at the earliest stage possible, of neutralised euro banknotes are proportionate to the objective pursued by such rules, namely to curb the possibility for thieves to recycle or obtain reimbursement for genuine euro banknotes that have been neutralised following the activation of an anti-theft device. The ECB understands that the draft Royal Decree does not affect the NBB’s competence with regard to the exchange and crediting of value of damaged euro banknotes, which will be dealt with by the NBB in accordance with applicable Union law, in particular Decision ECB/2013/10 . 3.2 The ECB also welcomes the fact that the draft Royal Decree empowers the NBB to adopt standards which the cash handling machines must comply with in order to identify and block the circulation of presumably neutralised banknotes. The ECB understands from the explanatory memorandum accompanying the draft Royal Decree that the NBB will take into account the rules to be adopted in this area by the ECB .

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 2 Diário da República, No 240 Series 1-A, of 14 October 1999.

text: Guideline

text: (EU) 2015/280

text: of the European Central Bank of 13 November 2014 on the establishment of the Eurosystem Production and Procurement System (ECB/2014/44) (OJ L 47, 20.2.2015, p. 29).

title: Opinion of the European Central Bank of 23 November 2015 on the production of euro banknotes (CON/2015/51)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 23 November 2015 on the production of euro banknotes (

text: ) Introduction and legal basis

text: On 7 October 2015, the European Central Bank (ECB) received a request from the Portuguese Ministry of Finance for an opinion on a draft decree-law (hereinafter the ‘draft decree-law’) amending the Portuguese legal framework for the production of euro banknotes. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the first and third indents of

text: , as the draft decree-law relates to currency matters and national central banks. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft decree-law

text: The draft decree-law amends the existing legal framework for the production of euro banknotes detailed in Decree-Law 400/99, of 14 October 1999 . The main purpose of the draft decree-law is to allow the Banco de Portugal (BdP), as a Eurosystem central bank with an in-house printing works, to participate in forms of mutual cooperation, either for the production of raw materials or for printing euro banknotes, between Eurosystem national central banks (NCBs) that produce euro banknotes using in-house printing works (hereinafter the ‘in-house group NCBs’). In order to facilitate the participation of BdP in such forms of cooperation, the draft decree-law eliminates the requirement for the BdP to hold a qualifying majority (51% or more) of the share capital of the legal entities that produce and print euro banknotes.

text: 2. General observationsThe ECB welcomes the draft decree-law as it adapts the legal framework for the production of euro banknotes to Guideline

text: (EU) 2015/280

text: of the European Central Bank (ECB/2014/44) , in particular as regards the possibility for the in-house group NCBs to enter into forms of cooperation to improve the cost-efficiency of euro banknote production.

text: 2.2 In accordance with Articles 1(2) and 8(2) of Guideline

text: (EU) 2015/282

text: (ECB/2014/44), when a separate legal entity is established, in the form of a cooperation between the in-house group NCBs, to produce euro banknotes, this entity may only be directly awarded contracts for the production of euro banknotes if it is jointly controlled by the in-house group NCBs that are party to the cooperation agreement. These provisions do not require that a certain minimum share in the capital of the legal entity concerned be held by the parties to the cooperation agreement. 2.3 Since Portuguese law still requires the BdP to hold 51% or more of the share capital of the legal entity that produces and/or prints euro banknotes, the ECB understands that this requirement must be eliminated in order to facilitate the BdP’s participation in the forms of mutual cooperation between Eurosystem NCBs provided for in Guideline

text: (EU) 2015/280

text: 3. Specific observations

text: 3.1 According to the new Article 2 of Decree-Law 400/99, as amended by the draft Decree-Law, the activity of producing and printing euro banknotes may be carried out by the BdP, within the Eurosystem, either directly or through the limited liability company Valora – Serviços de Apoio à Emissão Monetária, SA., or any other legal entity that the BdP establishes for this purpose, or in which it acquires a capital holding. 3.2 The ECB understands the reference to ‘within the Eurosystem’ as meaning that the production and printing of euro banknotes, regardless of whether it is done directly by the BdP or not, must be conducted in full compliance with the Eurosystem’s rules, such as those laid down by Guideline

text: (EU) 2015/580

text: (ECB/2014/44). 3.3 In this respect, the ECB notes that a more precise reference to the applicable ECB Guidelines would clarify the interpretation of Article 2 of Decree-Law 400/99, as amended by the draft Decree-Law. In order to make a general reference to the applicable ECB legal framework that would take into account any future legislative changes, it may be useful to include a general reference to the Eurosystem’s legal framework for the production and procurement of euro banknotes.

text: This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 23 November 2015.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


title: Opinion of the European Central Bank of 26 November 2015 on the deposit guarantee scheme (CON/2015/52)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 26 November 2015 on the deposit guarantee scheme (

text: ) Introduction and legal basis

text: On 9 October 2015 the European Central Bank (ECB) received a request from the Dutch Minister of Finance for an opinion on a draft legislative decree on the Dutch Deposit Guarantee Scheme (hereinafter the ‘draft decree’), which transposes Directive

text: of the European Parliament and of the Council on deposit guarantee schemes into Dutch law. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third and sixth indents of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions, as it relates to De Nederlandsche Bank (DNB) and to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft decree

text: 1.1. The draft decree implements Directive

text: and amends inter alia the Dutch Decree on special prudential measures, investor compensation and deposit guarantee (hereinafter the ‘Decree’), which was adopted pursuant to the Dutch Law on financial supervision. The draft decree should be read in the light of the Law on financial supervision as currently in place and the proposed amendments to it under another draft law that implements Directive

text: of the 2 3 European Parliament and of the Council (hereinafter the ‘draft law on BRRD Implementation’) . 1.2. The draft decree concerns the Dutch deposit guarantee scheme (DGS), which is presently operated by DNB. Based on the legislation currently in place, if a credit institution is no longer able to meet its obligations vis-à-vis depositors, the DGS is activated and the costs are apportioned among other participating credit institutions. Hence, the DGS is funded on an ex post basis by

text: 1 Directive

text: of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes (OJ L 173, 12.6.2014, p. 149).

text: 2 Directive

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190).

text: 3 The draft legislation is available on the website of the Dutch government at www.overheid.nl. contributions from the participating credit institutions and DNB advances the amounts needed for its operation. 1.3. Under the draft decree ex post funding arrangements for the DGS are replaced with ex ante funding arrangements. It establishes a deposit guarantee fund (hereinafter the ‘Fund’) which is a legal entity under public law with its own board, which is the owner of the financial resources in the Fund and is responsible for the management of the Fund’s resources. The Fund is financed through ex ante contributions imposed on participating credit institutions . Reimbursements that are paid under the DGS are charged to the Fund . The draft decree also provides for the possibility to call upon the participating credit institutions for extraordinary contributions if the pre-collected resources are insufficient. The Fund may enter into agreements with third parties to obtain financing from them if the extraordinary contributions are not available immediately . 1.4. The Law of financial supervision as currently in place, together with the draft law on BRRD implementation and the draft decree, assign certain tasks to DNB in the context of the operation of the DGS. (i) The Law on financial supervision as currently in place provides that DNB decides when the DGS is invoked and is responsible for granting the reimbursements within the applicable payment deadline . Moreover, insofar as depositors receive a reimbursement, DNB acquires the claims of these depositors and seeks recovery from the assets of the institution in relation to which the DGS has been activated . (ii) The draft law on BRRD implementation adds two provisions to the Law on financial supervision regarding new tasks of DNB in the context of the operation of the Dutch DGS. These provisions require that DNB (a) supports the Fund in the exercise of its tasks; (b) provides the Fund with the financial means that are necessary for the exercise of its tasks ; and (c) decides on the appointment, suspension and discharge of the Fund’s board members . These provisions form the legal basis for the draft decree. The ECB notes that it has not been consulted on the draft law on BRRD implementation. (iii) The draft decree provides for the following new tasks for DNB: (a) DNB determines the level of the ex ante contributions and of the extraordinary contributions of each participating credit institution and the period within which the ex ante contributions must be paid ; (b) DNB determines the currency in which the reimbursements are paid and, if reimbursements at the DGS’s expense cannot be granted and made payable within seven days, it grants the deposit holder an appropriate amount, at the expense of the Fund, so that they are able to

text: 4 See

text: Article 29.12

text: and Annex B of the draft decree.

text: 5 See Article 29.05 of the draft decree.

text: 6 See Article 29.14 of the draft decree.

text: 9 See

text: Article 3

text: :259a(4) of the Law on financial supervision (not yet in force).

text: 10 See

text: Article 3

text: :259a(3) of the Law on financial supervision (not yet in force). meet their living expenses ; and (c) any revenues obtained by DNB as a result of the exercise of its right of recourse are paid to the participating credit institutions or credited to the Fund , as applicable. (iv) The draft decree restates the following tasks that DNB already performs on the basis of the Decree: (a) DNB grants the reimbursements to deposit holders ; (b) DNB gives notice of its decision to apply the DGS in the Dutch Government Gazette and in national newspapers of its own choosing and publishes its decision to grant a reimbursement to a deposit holder on a website which deposit holders can use to make arrangements for the payment of the reimbursement ; and (c) DNB requests administrators or receivers of the institution in relation to which the DGS has been activated to draw the attention of deposit holders to the applicability of the DGS .

text: 2. General observations

text: 2.1. The ECB supports the establishment of an ex ante funded DGS in the Netherlands, in line with the common framework for DGSs laid down in Directive

text: . Harmonised arrangements and conditions for deposit protection are necessary to ensure a level playing field in the context of the Union’s single market for financial services . Ex ante funding of DGSs, supported by ex post funds collected if necessary, has the advantage of greater reliability and availability and considerably enhances financial stability, in particular because the reliance on ex ante contributions from the participating institutions may have a counter-cyclical nature . 2.2. The ECB stresses, however, that it is not addressing whether the draft decree effectively implements Directive

text: in Dutch law. Rather, the ECB focuses on those provisions that may impact on the role and tasks of DNB as a central bank and as a member of the Eurosystem and the European System of Central Banks (ESCB). In this respect, as far as central bank involvement is concerned, funding arrangements for DGSs must comply with the monetary financing prohibition laid down in the Treaty, and in particular with the prohibition of national central banks (NCBs) providing overdraft facilities or any type of credit facility within the meaning of Article 123 of the Treaty .

text: 13 DNB has this right of recourse based on the current Law on financial supervision, see point (i) above.

text: 18 See paragraph 4 of Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: 19 See paragraph 4.3 of Opinion

text: and Commission staff working document, Impact Assessment, Accompanying document to the Proposal for a Directive …/…/EU of the European Parliament and of the Council on Deposit Guarantee Schemes (recast) and to the Report from the Commission to the European Parliament and to the Council Review of Directive

text: on Deposit Guarantee Schemes, (COM(2010) 368), p. 58, available on the Commission’s website at www.ec.europa.eu.

text: 20 See paragraph 9.3 of Opinion

text: . 2.3. The ECB has developed the guidance set out in paragraphs 2.3.1 to 2.3.3 of this opinion on the basis of which it may decide whether a new task conferred on an NCB is to be considered a central banking task or a government task for the purposes of assessing such conferral against the prohibition of monetary financing . This guidance applies to genuinely new tasks that either did not exist in the past or did not form an integral part of the central banking tasks assigned to an NCB in the past. In recognition of the different Member States’ legal frameworks, central banking traditions and national set-ups, the tasks currently discharged by an NCB as central banking tasks are not reviewed and re-categorised, but may be reassessed if they are subject to legislative amendments of substance. In this regard, the ECB notes that the tasks previously conferred on DNB in relation to the operation of the Dutch DGS are, in part, different from the tasks conferred on DNB by the draft decree, which aims at changing essential elements of the set-up of the Dutch DGS. As a consequence, the tasks currently performed by DNB differ substantially from the tasks envisaged and should therefore be reviewed. Therefore, it should be assessed whether the new role of DNB in the operation of the DGS is compatible with the prohibition of monetary financing under Article 123 of the Treaty. The concrete assessment of whether DNB’s tasks in the context of the operation of the Dutch DGS are to be considered central banking tasks or government tasks is undertaken in paragraph 3.2 of this opinion. 2.3.1. General considerations First, the principle of financial independence requires that the Member States may not put their NCBs in a position where they have insufficient financial resources to carry out their ESCB − or Eurosystem − related tasks, as applicable. Second, central banking tasks comprise in particular those tasks that are related to the tasks listed in

text: Article 127(2)

text: , (5) and (6) of the Treaty. Third, new tasks conferred on an NCB which are atypical of NCBs’ tasks, or which are clearly discharged on behalf of and in the exclusive interest of the government or of other public entities, should be considered as government tasks. In that context, a distinction should be drawn between liquidity- and solvency-related tasks of NCBs. While, for the purposes of the monetary financing prohibition, solvency support is a government task, liquidity-related tasks, the ultimate objective of which are to finance the economy, are central banking tasks. 2.3.2. Specific considerations In principle, tasks related to a DGS can be assigned to central banks provided that they do not undermine an NCB’s independence in accordance with Article 130 of the Treaty. However, the discharge of these tasks by central banks may not extend to the financing of DGSs as these are government tasks. This is without prejudice to the possibility for central banks to provide short-term financing to DGSs provided that such financing addresses urgent situations, systemic stability aspects are at stake and decisions are at the discretion of the NCB .

text: 21 See Opinion

text: 22 See the ECB’s 2014 Convergence Report, p. 30, available on the ECB’s website at www.ecb.europa.eu, and paragraph 3.1.3 of Opinion

text: . An important criterion for qualifying a new task as a government task is the impact of the task on the institutional, financial and personal independence of the NCB. In particular, the following should be taken into account. First, it should be assessed whether the performance of the new task creates inadequately addressed conflicts of interests with existing central banking tasks, and does not necessarily complement those existing central banking tasks. If a conflict of interest arises between existing and new tasks, there should be sufficient mitigation in place to adequately address that conflict. Complementarity between the new task and existing central banking tasks should not, however, be interpreted extensively, so as to lead to the creation of an indefinite chain of ancillary tasks. Complementarity should also be examined from the point of view of the financing of those tasks. Second, it should be assessed whether without new financial resources the performance of the new task is disproportionate to the financial or organisational capacity of the NCB and may negatively impact its capacity to properly perform existing central banking tasks. Third, it should be assessed whether the performance of the new task does not fit into the institutional set-up of the NCB in the light of central bank independence and accountability considerations. Fourth, it should be assessed whether the performance of the new task harbours substantial financial risks. Fifth, it should be assessed whether the performance of the new task exposes the members of the NCB’s decision-making bodies to political risks which are disproportionate and may also impact on their personal independence and, in particular, the guarantee of the term of office under Article 14.2 of the Statute of the European System of Central Banks and of the European Central Bank. 2.3.3. Any final assessment on the qualification of a task given to an NCB as either falling within the scope of a central banking task or a government task will be guided by the objective of ensuring the consistent application of the prohibition of monetary financing within the Eurosystem and the ESCB to the extent that it applies to its members.

text: 3. Specific observations

text: 3.1. The role of DNB in the operation of the DGS The ECB welcomes the draft decree, as it establishes an ex ante funded DGS. The ECB stresses, that the tasks to be discharged by DNB under the proposed reallocation of responsibility for the performance of the functions related to the DGS need to comply with the monetary financing prohibition under Article 123 of the Treaty . To this end, it is of the utmost importance that the role of DNB is clearly defined in the legislative framework on the DGS by further aligning the Law on financial supervision with the aims of the draft decree and clearly

text: 23 See paragraphs 3.1.1-3.1.3 of Opinion

text: . embedding the distribution of tasks and responsibilities between DNB and the Fund, as is further discussed in paragraphs 3.2.5 and 3.2.9. 3.2. Conferral on DNB of tasks related to the DGS DNB is designated as the authority which, together with the Fund, operates the DGS. The draft decree aims to change DNB’s role in the context of the operation of the DGS and assigns some additional tasks to DNB. In the light of the guidance set out in paragraphs 2.3.1 to 2.3.3, it must be assessed whether DNB’s tasks and responsibilities in this field could constitute a breach of the monetary financing prohibition. 3.2.1. New tasks It is noted that DNB currently has tasks in the context of the operation of the DGS under the Decree and the Law on financial supervision. DNB continues to perform these tasks, although the draft decree revises the set-up of the DGS and thereby, on the one hand, aims to change some of DNB’s responsibilities relating to the DGS and, on the other, assigns additional tasks to DNB, such as the determination of the level of ex ante contributions and of the extraordinary contributions each participating credit institution must pay and the granting to deposit holders of an appropriate amount, at the expense of the Fund, so that they are able to meet their living expenses if reimbursements at the DGS’s expense cannot be granted and made payable within seven days. In addition, the draft law on BRRD implementation requires that DNB: (a) supports the Fund in the exercise of its tasks; (b) provides the Fund with the financial means necessary for the exercise of its tasks ; and (c) decides on the appointment, suspension and discharge of the Fund’s board members 3.2.2. Principle of financial independence The principle of financial independence requires an NCB to have sufficient means not only to perform its ESCB-related tasks but also its own national tasks (e.g. financing its administration and own operations) . When allocating specific non-ESCB related tasks to the NCBs, such as tasks in the area of deposit protection, additional human and financial resources must also be allocated for these tasks to be carried out in a manner that will not affect the NCBs’ operational capacity to perform their ESCB-related tasks . In this regard, the ECB notes that the Law on financial supervision stipulates that the credit institutions bear the costs of the DGS . The ECB understands that this provision refers to both the reimbursements that are paid under the DGS and the costs of DNB’s tasks related to the operation of the DGS. The possibility for DNB to recover its operational costs from the participating credit institutions has a positive impact on DNB’s financial capacity to assume those tasks. However, the

text: 25 See

text: Article 3

text: 26 See

text: Article 3

text: 27 See the ECB’s 2014 Convergence Report, p. 25. See also paragraph 3.1.5 of Opinion

text: , paragraph 3.1 of Opinion

text: , paragraph 4 of Opinion

text: and paragraph 4 of Opinion

text: 28 See, for example, paragraph 4 of Opinion

text: . ECB notes that no reference is made in the draft decree to the costs incurred by DNB in carrying out its DGS-related tasks. According to the explanatory memorandum, it will be necessary to levy a separate charge to cover the costs incurred in relation to the DGS. Such a separate levy will be charged based on the Law on financial supervision funding. The ECB understands that it is being examined whether the current allocation criteria regarding the charging of the costs associated with the execution of the DGS require any amendment . Taking into account the principle of financial independence, which is a key aspect of the principle of central bank independence as laid down in

text: Article 130

text: TFEU, it needs to be ensured that DNB has sufficient funds for fulfilling its task of operating the DGS. 3.2.3. Links to tasks listed in

text: Article 127(2)

text: , (5) and (6) of the Treaty As the ECB observed in an earlier Opinion , central banks are in general in a good position to take on responsibility for financial stability, given their insight into money and financial market developments and their involvement in payment systems and monetary policy operations. At the same time, DGSs are a key element of the financial safety net. Therefore, the governance framework should ensure that the important function of such schemes is carried out professionally and efficiently. Moreover, effective coordination with the overall role of central banks in safeguarding financial stability should be ensured. This aim may be achieved through, among other things, maintaining an adequate level of involvement of the central bank in the governance and regulation of the national DGS. 3.2.4. Atypical tasks A number of Member States have conferred on their NCBs a role in the operation of their DGSs. The tasks of an NCB with regard to the operation of the DGS could therefore be regarded as being tasks not atypical of a central bank. As noted in paragraph 3.2.1, DNB currently has tasks related to the operation of the Dutch DGS. 3.2.5. Discharge of tasks on behalf of and in the exclusive interest of the Government or of other public entities DNB is designated as the authority which, together with the Fund, operates the Dutch DGS. DNB is an independent public body that is not subordinate to the Minister . DNB is accountable for the performance of these particular tasks to the Minister and the Minister has, among other things, the right of access of information on DNB’s tasks . As noted above, the tasks to be discharged by DNB under the proposed reallocation of responsibility for the performance of the functions related to the DGS still need to be clarified. Unless the Law on financial supervision is aligned with the aims of the draft decree, the responsibilities and the functions to be performed by DNB under the Law on financial supervision,

text: 30 See the explanatory memorandum to the draft decree, p. 23.

text: 31 See paragraph 3.3 of Opinion

text: Article 1

text: :30 of the Law on financial supervision and Article 1 of the framework Law on non-departmental public bodies.

text: Article 1

text: :30, 1:37 and 1:42 of the Law on financial supervision and Article 18 of the framework law on nondepartmental public bodies. i.e. to grant the reimbursements within the applicable payment deadline and, insofar as depositors receive a reimbursement, to acquire the claims of these depositors and to seek recovery from the assets of the institution in relation to which the DGS has been activated, appear to be tasks discharged by DNB in the exclusive interest of the Government. Moreover, the ECB notes that in the explanatory memorandum to the draft decree the functions to be performed by DNB are seen in the light of the draft law on BRRD implementation that requires DNB to provide the Fund with the financial means necessary for the exercise of its tasks . In addition, the explanatory memorandum states that it cannot be excluded that DNB may, if necessary and in the interests of efficiency, be authorised to carry out certain (payment) transactions on behalf of the Fund . Insofar as DNB would be required to provide the necessary financial resources to the Fund and to carry out the Fund’s tasks, these would be tasks discharged by DNB in the exclusive interest of the Government. 3.2.6. Extent to which conflicts of interests with existing DNB tasks are addressed and the performance of tasks fits into DNB’s institutional set-up in the light of central bank independence and accountability considerations The conferral of the tasks on DNB does not, prima facie, raise any issues of conflicts of interest. The performance of DNB’s new tasks in the context of the Dutch DGS fits into DNB’s institutional set-up, which was adapted to DNB’s functions as regards the operation of the current DGS. The complementarity between the tasks related to the operation of the DGS and the supervisory tasks discharged by DNB, could be regarded as being reflected in the common system for the financing of DNB’s tasks via contributions from the supervised entities. The performance of these tasks does not raise any issues arising out of accountability considerations. The draft decree requires close cooperation between DNB and the Fund. It provides that the Fund is accountable to DNB in the exercise of its tasks by, among other things, providing DNB an annual financial report that describes the exercise of the Fund’s tasks and the pursued policy . DNB is, in its turn, accountable for the performance of its tasks to the Minister . 3.2.7. Extent to which the performance of tasks is proportionate to DNB’s financial and operational capacity and its ability to perform its ESCB-related tasks In order to remain financially independent, DNB must have sufficient means to carry out not only its ESCB-related tasks from an operational and financial point of view, but also its national tasks. In this regard the ECB welcomes the fact that the Law on financial supervision stipulates that credit institutions bear the costs of the Dutch DGS. However, further clarifications are needed so as to ensure that DNB is adequately remunerated for the costs of operating the DGS.

text: 34 See

text: Article 3

text: 35 See the explanatory memorandum to the draft decree, p. 21.

text: Article 29.10

text: (2) and (3) of the draft decree and

text: Articles 18(1)

text: , first and second sentence, 20, 26, 34(1) and 35(1) of the framework Law on non-departmental public bodies.

text: Article 1

text: :30 and 1:42 of the Law on financial supervision and Article 18 of the framework Law on non-departmental public bodies. According to the explanatory memorandum to the draft decree, DNB will incur one-off, structural and incidental costs that relate to the support it provides to the Fund for its payment and management tasks, to the provision of the necessary financial means to the Fund, and to its own tasks. These costs will, inter alia, relate to the transition from an ex post to an ex ante funded DGS, to the determination of the amount of the contributions payable by the credit institutions and to the supervision of the institutions' fulfilment of the payment commitments. Given that it is not clear to what extent the charges to be levied would cover the financial resources required with regard to the operation of the DGS, the ECB recommends that the draft decree should explicitly specify that sufficient funds will be made available to DNB for fulfilling its task of operating the DGS. 3.2.8. Extent to which the performance of tasks involves substantial financial risks As noted in paragraph 3.2.5, the Law on financial supervision stipulates that, insofar as the depositors received a reimbursement, DNB acquires the claims of these depositors on, and seeks recovery from, the assets of the institution in relation to which the DGS has been activated. It is not clear to what extent DNB is affected financially by the task to recover on its own behalf the claims on the institution in relation to which the DGS has been activated. Hence, the ECB recommends aligning the provisions in the Law on financial supervision with the distribution of tasks and responsibilities between DNB and the Fund as laid down in the draft decree. 3.2.9. Conclusion The ECB welcomes the shift of responsibilities from DNB to the Fund as well as the Fund’s role in the provision of reimbursements under the DGS. However, it is of the utmost importance that the role of the DNB is clearly defined. This clarification is all the more needed in relation to any financing of the Fund’s tasks which the ECB considers to be a discharge of a government task. As consistently emphasised by the ECB, in line with the prohibition on monetary financing, an NCB may not finance DGSs . In addition, clarification would be recommended with regard to the costs of operating the DGS. The ECB emphasises the importance of having all the rules according to which the ex ante Fund is being established fully compliant with the rationale that it is the Fund itself, rather than DNB, which finances the tasks of the DGS, including the pay-outs of the guaranteed deposits. As noted above, insofar as DNB would be required to provide the necessary financial resources to the Fund and to carry out the Fund’s tasks, these would be tasks discharged by DNB in the exclusive interest of the Government. Consequently, the ECB recommends that the Law on financial supervision is further aligned with the aims of the draft decree. To that end, it should be made clear that: (i) the Fund is responsible for paying out the reimbursements under the DGS; and (ii) the Fund, rather than DNB, acquires depositors’ claims and seeks recovery from the assets of the institution in relation to which the DGS has been activated. In addition, the draft decree should provide for the Fund’s, rather than

text: 38 In line with Opinion

text: , which relates to another draft law on the Dutch DGS, the ECB would reiterate its view that the only forms of central bank financing of a national DGS for credit institutions compatible with the monetary financing prohibition are: (i) intraday credit in line with the general rules on provision of such credit by the central bank; and (ii) short-term funding addressing urgent situations in cases in which systemic stability aspects are at stake and the decisions are at the central bank’s discretion. DNB’s, right of recourse and disbursement by the Fund of any revenues to the participating credit institutions. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 26 November 2015. [signed] The President of the ECB Mario DRAGHI